The impact of Islamic bank financing on business

• Published in: Entrepreneurship and Sustainability Issues Vol. 7; no. 1; pp. 133 - 145
• Main Authors: Herianingrum, Sri, Ratnasari, Ririn Tri, Widiastuti, Tika, Mawardi, Imron, Amalia, Rachmi Cahya, Fadhlillah, Hanif
• Format: Journal Article
• Language: English
• Published: Vilnius Entrepreneurship and Sustainability Center 01.09.2019
• Subjects: Cointegration analysis; Islamic financing
• ISSN: 2345-0282; 2345-0282
• DOI: 10.9770/jesi.2019.7.1(11)

From the test results concluded that the Local Number Index (LNI) variable (business tendency index) affects Local Number Portability (LNP) variable (Islamic bank financing). The LNP variable (Islamic bank financing) does not affect this variable (business tendency index). So, there is one-way causality from the LNI (business tendency index) to LNP (Islamic bank financing). Other statistical test results showed that there is a long-term relationship between Islamic bank financing and business tendency. This is clarified by the results obtained from Johansen cointegration test. The result of cointegration test in this research is there is long-term relationship between syariah bank financing and business tendency. From the test results can be seen that the trace statistic is greater than the critical value of 5%. So in the long term, Islamic financing variables and business tendencies will affect each other. This shows that the financing of sharia banks whose allocation of financing is directed to the real sector, even forbidden to finance riba investments and speculation, will drive the business nationally, and vice versa, business that runs well and smoothly, will contribute to the development of Islamic banking performance.