Journal of Indonesian Economy and Business

Socio-Demographic Determinants of Insurance Literacy among University Students in Indonesia

Reza Yamora Siregar — 2024-09-10

Introduction/Main Objectives: This research aims to investigate the level of insurance literacy among economics and business students and identify the socio-demographic factors impacting the level of insurance literacy. Background Problems: Low insurance literacy has long been identified as the cause behind the weak insurance penetration growth in Indonesia. College students area potential market for the development and deepening of the insurance sector. Novelty: However, hardly any studies have been published that assess the insurance literacy of university students in Indonesia. This study also presents a unique view of students’ insurance knowledge across different universities in Indonesia, providing an understanding of the factors contributing to their literacy level. Research Methods: We conduct the commonly applied ordinary least squares test on the survey data collected using stratified random sampling. Findings/Results: The test results conclude that students from universities in Java, who have mothers who graduated from college, come from middle-income families, and live in Java have significantly higher insurance literacy levels compared to the rest of the students. However, gender and residency do not seem to significantly impact insurance literacy. Conclusion: Our study shows that socio-demographic factors influence university students’ level of insurance literacy. These findings provide valuable information for policymakers and insurance firms to target this potential market with their insurance products.

Video-On-Demand Streaming Services Subscription Antecedents and Consequences: The Uses and Gratifications Theory Approach

Shofwah Syafira — 2024-09-10

Introduction: This study aims to examine the impact of affective gratification, tension release, cognitive gratification, perceived risk, and viewing addiction on subscription behavior as antecedents and its consequence namely customer engagement. Background Problems: The need for satisfaction is a trigger for media use. As time passes, research on media use through use and audience gratification approaches will always be needed, so this should be carried out in the context of streaming services. Novelty: This research focuses on streaming services using the uses and gratifications theory approach. Similar research has focused on the theoretical implications of usage attitudes, but this research has implications for actual usage behavior, namely subscription behavior. Research Methods: Data have been collected using an online survey with purposive sampling and then analyzed using partial least squares structural equation modeling. Findings: The results suggest that only five of the 13 hypotheses proposed are supported. Companionship and cognitive gratification do not affect subscription behavior, while perceived risk did not impact subscription behavior negatively. Conclusion: The results of this study indicate that streaming service subscribers are more concerned with functional benefits, such as service usability, variety of content, entertainment, and relaxation media. Furthermore, the implications of this research provide benefits both theoretically and practically

Rural Government Cooperation Intensity and Leadership in Fostering the Innovation Capabilities of Rural Microbusinesses

Ardy Wibowo — 2024-09-10

Introduction: The growth of rural entrepreneurship significantly impacts economic growth and the well-being of rural communities. Background Problem: Innovation is crucial for entrepreneurs' success, with rural government playing a pivotal role in rural societies. Novelty: This study overviews the role of rural government in fostering entrepreneurial innovation, focusing on inter-organizational collaboration and the village head's leadership style. Research Method: Employing a quantitative survey methodology, the study undertook direct surveys of 300 rural micro- and small-scale entrepreneurs from diverse industries in Indonesia. A simple random sampling technique was used to ensure a representative sample of the population. Data were analyzed using Structural Equation Modeling—Partial Least Squares. Findings: The analysis reveals that rural government cooperation and transformative leadership positively influence entrepreneurs' perceptions of organizational support. In turn, perceived organizational support significantly impacts the desire for knowledge sharing and innovation capability enhancement. This study diverges from previous research by examining the mediating roles of knowledge sharing and perceived organizational support in innovation capability enhancement. It confirms that perceived organizational support is a vital mediator in the relationship between government cooperation intensity, transformational leadership, and innovation capability. Conclusions: The findings underscore the need for rural governments to practice effective cooperation and leadership and provide consistent support. Such strategies facilitate a supportive environment that fosters knowledge sharing and significantly boosts rural entrepreneurs' innovation capabilities.

The Effect of Government Policy on Infrastructure Priorities on the Profitability of Construction Companies in Indonesia 2011-2019

Ahmad Rifai — 2024-09-11

Introduction/Main Objective: The Indonesian government's policy of prioritizing the acceleration in infrastructure development will certainly have an impact on construction companies. Background of the Problem: This research aims to determine the influence of internal and external company factors on the profitability of companies in the building construction subsector. Novelty: This research analyzes the impact of increasing the government's infrastructure budget on the profitability of building construction subsector companies. Research Method: This research uses panel data regression analysis with annual financial report data from building construction subsector companies listed on the Indonesia Stock Exchange for the period from 2011 to 2019, which is divided into the period before the infrastructure sector became the focus of development (2011 to 2014) and after (2015 to 2019). Profitability is measured using the return on assets. The external factors are measured using the infrastructure budget and inflation, while the internal factors are measured using company size, liquidity, leverage, cash turnover, working capital turnover and receivables turnover. Findings/Results: This research concludes that the infrastructure budget, company size, and liquidity do not have a significant positive effect on company profitability, while inflation does not have a significant negative effect on profitability. Furthermore, cash turnover, working capital turnover, and account receivable turnover have a significant positive effect on profitability, while leverage has a significant negative effect on profitability. Conclusion: This research shows that companies should periodically review the impact of loans and always maintain the composition of their funding, according to their needs. Meanwhile, the government needs to evaluate the auction process, and sharpen its alternative infrastructure project funding strategies.

Do the Characteristics of Startup Founders Matter for Funding Performance?

Rayenda Khresna Brahmana — 2024-09-11

Introduction/Main Objectives: Based on the upper echelons theory, this research examines the role of startup founders' characteristics on startup funding performance (SFP). This study considers the founder's experience, education, and gender as the characteristics that positively affect the SFP. Background Problems: While academia and industry emphasize the importance of startup funding performance (SFP), the empirical evidence on its determinant has received less attention. Yet, upper echelons theory addresses the importance of a leader's characteristics in increasing the organization's performance. Therefore, the current study focuses on investigating the role of startup founders' characteristics in the SFP. Novelty: The current study proposes the founder's characteristics as the key factor for startup funding. Unlike previous studies, this study utilized a survey design to answer the research question. Additionally, this study is the pioneer for entrepreneurial finance studies in gauging the upper-echelons framework. Research Methods: This research collected information from 228 Indonesian Startups through a survey. The estimation model is estimated using robust cross-sectional OLS regression and logistic regression. For robustness purposes, this study tackles the endogeneity issue by using two-stage least squares (TSLS) and PLS-SEM. Finding/Results: The regression results (including the two-stage least square approach) reveal that education and gender play a significant role in SFP but not experience. Moreover, it shows that higher education would increase a startup's probability of having better funding. Meanwhile, male entrepreneurs have lower funding performance than women entrepreneurs. Conclusion: Our study surmises that the education of the founders is crucial for startup financing in Indonesia. It also shows that the experience of founders has a trivial effect. It supports the upper echelons theory, emphasizing the pivotal role of founders' characteristics in entrepreneurial finance. Policy-wise, focusing on education can enhance startup success while addressing gender disparities is crucial. However, limitations exist, suggesting the need for longitudinal studies and broader sample sizes. Future research could explore managerial abilities and cultural factors, offering fresh insights into the literature.