Actual Economy: Local Solutions for Global Challenges

Actual Economy: Local Solutions for Global Challenges 2016

PROCEEDINGS OF 3rd INTERNATIONAL CONFERENCE BANGKOK, THAILAND, JANUARY, 2016

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Day 1 // 13.00 – 15.00. Room Charoenmuang Session 1.2 – Problems of international financial markets and commercial banks functioning Chairman: Agus Hekso Pramudijono Ministry of Finance of Republic of Indonesia 1

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Ahmad Adriansyah, Surachman Surjaatmadja (Indonesia Banking School) Two Factors That Determine Innovation Performance in Indonesia Banking Industry: A Knowledge Based View Perspective Nuri Wulandari, Abdul Salam (Indonesia Banking School) Cashless Payment as an Alternative Solution for Black Money in Tourism Amir Machmud (Indonesia University of Education, Bandung, Indonesia) The Determinants Of Islamic Banking Finance Performance In Indonesia Ikaputera Waspada (Indonesia University of Education, Bandung, Indonesia) Profitability Analysis Of Stock Price Telecommunications Sector Sub In Indonesia Stock Exchange (Idx) Year 2009-2014 Maya Sari, Disman, Nugraha (Indonesia University of Education, Bandung, Indonesia) Capital Structure Determinants: Empirical Evidence From Indonesia Capital Market I Made Surya Negara, Sudirman, I Gusti Bagus Wiksuana (Udayana University, Indonesia) An Evidence of Capital Markets Cointegration Decline in Five ASEAN Countries Agus Hekso Pramudijono, Abdul Gaffur A Dama (General Finance Education and Training Center, Finance Education and Training Agency, Ministry of Finance of Republic of Indonesia) National Potential Loss While Using Foreign Payment Network Husaina Banu Kenayathulla (University of Malaya, Malaysia) Financial adequacy and low performing schools: Evidence from Malaysia

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Two Factors That Determine Innovation Performance in Indonesia Banking Industry: A Knowledge Based View Perspective Ahmad Adriansyah Surachman Surjaatmadja

Indonesia Banking School, Kemang Raya no 35, Jakarta, Indonesia

Abstract

[email protected] [email protected]

Innovation performance is an important construct for companies. It is an importance source of competitive advantage and determines the whole company’s performance. Therefore, many researchers have studied various factors that influence the performance of innovation, in various contexts. We use knowledge, as an important source of innovation. We use experience as a proxy of internal knowledge own, and absorptive capacity as capability to utilize external knowledge, on a sample of 49 Indonesian banks. Using Structural Equation Modeling (SEM) -variance based, results shows that both knowledge, significantly influence innovation performance. Experience is more important than absorptive capacity, and both are able to explain innovation performance by 79%. It is in line with Knowledge Based View (KBV), that knowledge is sources of competitive advantage. Performance, Experience, Absorptive Capacity, Bank, Key-words Innovation Knowledge Based View (KBV)

Introduction Innovation performance is an important construct for companies. It is an importance source of competitive advantage and determines the whole company’s performance especially in the long run perspective (Tian & Wang, 2014) and in the era of knowledge base economic (Chen, Ling & Chang, 2009). Current business mantra is “Innovate or Die”. Innovation is important for the organization, but many innovations do not have a positive impact on organizational performance (Rosenbusch, Brinckmann & Bausch, 2011). Therefore, many researchers have studied various factors that influence the performance of innovation, in various contexts (van der Panne, van Beers & Kleinknecht, 2003). One of the most importance issues is the source of innovation, the knowledge and new idea (Ramadani and Gerguri, 2011). In management strategic, it is known as Knowledge Based View/KBV perspective (Hoskisson, Hitt, Wan, Yiu, 1999). Knowledge and ideas can come from internal’s experience or come from external. Company need capability to acquire and utilize knowledge or idea from external, it is Absorptive Capacity/ACAP (Ramadani and Gerguri, 2011). ACAP has been proven as one of the critical success factors of innovation (Chen et al, 2009; Yongping, Yanzhenga, Haomiao 2011; Kostopoulos, Papalexandris, Papachroni, Ioannou, 2010). Did the experience and the ACAP is also important in shaping the innovation performance in the banking industry? Banking industry is highly regulated industry. In Indonesia banks need approval from banking regulator, before launching their new product. Banks in Indonesia itself, considered less innovative, even for banks that apply prospector strategy though.

Literature review Van der Panne, van Beers and Kleinknecht (2003) revealed that experience is one factor that has consistently demonstrated innovation as a critical success factor. Experience is important in learning cycle product development, speeding up the process of pitching a product to market, increasing the tolerance to failure (Tian and Wang, 2011), as well as important for organizational performance overall (Abdi and Senin, 2014). The results of the above studies form the basis of this study Hypothesis 1: H1: Experience positively relates to innovation performance Impact of ACAP most studied is the innovation (Kostopoulos et al., 2010). Liao, Fe and Chen, (2007) proved the positive effect of ACAP on innovation capabilities. Nieto and Quedo (2005) demonstrate the effect of ACAP on innovation activities. Other researchers using innovation performance (Kostopoulos et al., 2010; Chen et al., 2009) or the achievement of innovation as a result of ACAP (Yongping et al., 2011). Innovation performance is considered more important in shaping the company's performance and competitive advantage (Chen et al, 2009). H2: ACAP positively relates to innovation performance.

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Actual Economy: Local Solutions for Global Challenges 2016 Methodology

Questionnaires were distributed to all commercial banks in Indonesia which amounted to 120 banks. The respondent is a member of top management, as a representative of the company. It is operationalized by the two highest levels in the bank, the board of directors as well as officers who reports to the director. Measurement of innovation performance in this study using the output of innovation, as performed by Chen et al (2009). This study adopted the measurement of innovation performance of Chen et al (2009), which has adequate validity and reliability. Innovation performance is measured using two dimensions, namely a product innovation and process innovation. Product and process innovation performance is rated as the two most important factors representing innovation as a whole (Capitanio, Coppola, Pascucci 2010). Measurement of innovation performance in this study using the diversity of experience. Diversity of experience is important for the organization, because the more diverse the experience, the greater the chance there is of relevant experience and is similar to the new knowledge to be absorbed by the company (Cohen and Levinthal, 1990). Relevance and similarity of experience with new knowledge is essential for the organization (Gupta and Govindarajan, 2000). Model tested by Structural Equation Modeling (SEM)-variance based. We use Smart PLS 3.0 application. Testing the validity of using a loading of at least 0.5, while the reliability testing using the Average Variance Extracted (AVE), at least 0.5 and Composite Reliability (CR) of at least 0.7 (Hair et al, 2006).

Conclusions All validity and reliability meet the criteria. From a total of 46 initial items, 44 items can be used and 2 items rejected. Item’s loading between 0.531-0.954 (above 0.500), with reliability AVE 0.672-0.931 (above 0.500) and CR 0.899-0.931 (above 0.700). All dimension of ACAP, and innovation performance also used because it has a loading between 0.886-0.962 (above 0.500). Research model test results can be seen in the following figure: The figure above show that experience positively (0,578) and significant (t value= 5.985; above 1.96) influence innovation performance, then H1 accepted. ACAP also positively (0,414) and significant (t value= 3.965; above 1.96) influence innovation performance, then H2 accepted. Experience and ACAP, can explain 79.2% of innovation performance’s variance, while the rest (20.8%) explained by other factors. The results proved that knowledge is essential in improving innovation performance. Innovation itself is a source of competitive advantage (Chen et al, 2009; Ramadani & Gerguri, 2011). It means that this study supports the Knowledge Based View / KBV, who believes that knowledge is the source of competitive advantage. This research is in line with the review of van der Panne, van Beers and Kleinknecht (2003) which revealed that the experience is one factor that has consistently proven to be the critical success factors of innovation. The study also proved that the capability to acquire and utilize knowledge and information from external organization was also able to improve innovation performance significantly. These results are consistent with research from Kostopoulos et al., (2010), Chen et al., (2009) as well as Yongping et al., (2011). In comparison, the effect of experience on innovation performance is more important than the influence of ACAP on the performance of innovation. Taken together the experience and ACAP is able to explain innovation performance by 79.2%.

Acknowledgement The author would like to thank Prof. Firmanzah, PhD, Prof. Dr. Adi Zakaria Afiff, Mr. Surban Batubara, Dr. Widigdo Sukarman, Dr. Doddy Soewito, all research’s participant, and University of Indonesia - Faculty of Economics & Business. We also would like to thanks Dr. Subarjo Joyosumarto and to all Indonesia Banking School faculty member.

References Abdi, K., Senin, A.A., (2014). Investigation on the Impact of Organizational Culture on Organization Innovation. Journal of Management Policies and Practices, 2(2), 01-10. Capitanio, F., Coppola, A., Pascucci, S. (2010). Product and process innovation in the Italian food industry. Agribusiness, 26(4), 503–518. Chen Y.S., Lin M. J. J., Chang C.H. (2009). The positive effects of relationship learning and absorptive capacity on innovation performance and competitive advantage in industrial markets. Industrial Marketing Management, 38, 152–158. Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning an innovation. Administrative Science Quarterly, 35: 128–152

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Actual Economy: Local Solutions for Global Challenges 2016 Gupta A. K., Govindarajan V. (2000). Knowledge flow within multinational corporations. Strategic Management Journal 21(4): 473–496. Hair J.F., Black W.C., Babin B.J., Anderson R.E., Tathan R.L., (2006). Multivariate data analysis. Sixth edition. Pearson Education Inc. New Jersey. Hoskisson, R.E., Hitt, M.A. Wan, W.P., Yiu, D. (1999). Theory and research in strategic management: Swings of a pendulum. Journal of Management, 25(3), 417–456. Kostopoulos K, Papalexandris A, Papachroni M, Ioannou G. (2010), Absorptive capacity, innovation, and financial performance, Journal of Business Research. Liao S, Fei W, Chen C (2007). Knowledge sharing, absorptive capacity, and innovation capability: an empirical study of Taiwan’s knowledge intensive industries. Journal of Information Science, 33 (3): 340–359 Nieto, M, Quevedo, P (2005). Absorptive capacity, technological opportunity, knowledge spillovers, and innovative effort. Technovation, 25, 1141–1157. Ramadani, V., Gerguri S. (2011). Theoretical Framework of Innovation and Competitiveness and Innovation Program in Macedonia. European Journal of Social Sciences – Volume 23 (2), 268-276. Rosenbusch, N., Brinckmann, J., Bausch, A. (2011). Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs. Journal of Business Venturing, 26, 441–457. Taylor A, Greve HR. (2006). Superman Or The Fantastic Four? Knowledge Combination And Experience In Innovative Teams. Academy of Management Journal, 49(4), 723–740. van der Panne, van Beers, Kleinknecht, (2003). Success and Failure of Innovation: A Literature Review. International Journal of Innovation Management, 7(3), 1–30. Yongping X, Yanzhenga M, Haomiao Z (2011). Analysis of Influence of Network Structure, Knowledge Stock and Absorptive Capacity on Network Innovation Achievements. Energy Procedia, 5, 2015–2019.

Cashless Payment In Tourism; An Application Of Technology Acceptance Model, Perceived Risk And Familiarity Nuri Wulandari

Indonesia Banking School

[email protected]

Abstract

Technology has given a profound impact on how tourism industry develops in the recent decades. One of the important technology advancement is cashless payment system. It has been suggested to enhance tourism experience, providing competitive advantage to market destinations as well as a solution to the creation of black money in tourism destinations. Currently, governments are actively promoting a cashless society in tourism sector. However, the study of the acceptance of tourists on cashless payment technology in destinations is still rarely found. This study aims to investigate the acceptance of cashless payment using Technology Acceptance Model (TAM). To achieve the objective, the study investigated the tourist’s perspective of cashless payment system by a focus groups discussion involving young-independent travellers in Indonesia. A survey was also carried out to confirm the relationship between cashless acceptance, attitude and the behavioral intention of cashless technology. In addition, Perceived Risk and Familiarity were also introduced to the model. The study found three drivers of attitude regarding acceptance of cashless payment system and an understanding on how customers response to the idea of using cashless payment in tourism setting. Behavior, Destination Marketing, Tourism, Key-words Consumer Cashless, Payment System

Introduction Information and Communication Technology (ICT) is increasingly playing a critical role for competitiveness of tourism organizations and destinations as well as for the entire industry as a whole (Buhalis & Law, 2008; UNWTO, 2011). Internet technology has dramatically affected the changes in behavior of tourist (Mills & Law, 2004, Mihaljovic, 2014). Users of ICT can easily booking online ticket and rooms (Morrison, Jing, O’Leary, & Lipping, 2001)search information and make payment using their mobile. Understanding how IT impacts the behavior of consumers is critical foundation to develop sustainable marketing communication strategies (Xiang, Magnini, & Fesenmaier, 2015). One of the areas in tourism and technology, which become the focus of interest, was in the cashless payment system. The advancement of technology such as Radio Frequency Identification (RFID) and Near Field Communication (NFC) have enable ease of payment thus it provide seamless experience for tourists. Cashless transaction has been suggested to increase efficiency thus it is faster and cheaper in handling. Tourism and hospitality industry is actually one of the first industries that adopt non-cash transaction, however the implementation is mostly in in the gaming industry (Parke, Rigbye, & Park, 2008). Studies on how tourist accepts cashless payment system in tourism destination still needs further support. This study departs from an unique angle of consumers in destination who were in early stages of adopting cashless payment system. Within this destination, understanding of the acceptance of the relatively new technology is crucial to serve as base for the implementation. Destination stakeholders needs to understand explore role of payment system in destination and the factors driving the acceptance of cashless payment system in tourism context. - 58 -


Table of contain Chapter 1. Modern economic policy: regional and national aspects Economic modernization of BRICS countries on their way to global creativity Oleg Patlasov The Functioning and Safeguard Operation of Integrated Rescue System in the Slovak Republic Karol Janas Economic and Social Priorities in Political Parties´ Manifestos for Parliamentary Election in the Slovak Republic in 2016 Rudolf Kucharcik Political Marketing At The General Election In Indonesia Heny Hendrayati , Vanessa Gaffar Realigning Indonesia’s Human Resource Development Strategy in Dealing with ASEAN Economic Community Mila Mumpuni, Agusta Rizar Binadja The Isan Economy: An Actual Local Solution for Global Challenges Martin Allinson Combatting Poverty under the Conditions of Mass Increase of Transcontinental and Cross-Border Migration: Time for A Paradigm Shift AlshanovR.A. KalenovaS.A., Nurzhaubayeva R.D. Sufficiency Economy as a Strategy for Value Chain Process Improvement Siriwan Saksiriruthai Governance in terms of the multinational entrepreneurship development: problems, prospects, directions for further transformations Aleksey Arkhipov, Denis Ushakov Global cities networking as a trend of global economy development Denis Ushakov, Shieh Chich-Jen

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Chapter 2. Problems of international financial markets and commercial banks functioning Two Factors That Determine Innovation Performance in Indonesia Banking Industry: A Knowledge Based View Perspective Ahmad Adriansyah, Surachman Surjaatmadja Cashless Payment In Tourism; An Application Of Technology Acceptance Model, Perceived Risk And Familiarity Nuri Wulandari Analysis Of Structure, Conduct And Performance Of Sharia Insurance Industry In Indonesia Amir Machmud Profitability Analysis Of Stock Price Telecommunications Sector Sub In Indonesia Stock Exchange (Idx) Year 2009-2014 Ikaputera Waspada

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Actual Economy: Local Solutions for Global Challenges 2016 An Evidence of Capital Markets Cointegration Decline in Five ASEAN Countries I Made Surya Negara Sudirman, I Gusti Bagus Wiksuana Potential of National Loss Due to Using Foreign Payment Network Agus Hekso Pramudijono, Abdul Gaffur A Dama Financial Adequacy and Low Performing Schools: Evidence from Malaysia Husaina Banu Kenayathulla The Effect Analysis of Current Ratio and Return on Assets on Initial Return Lorina Siregar Sudjiman

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Chapter 3. SME development: modern tendencies and regional features The Influence Of Entrepreneurial Leadership And Good Governance To Operational Performance Mediated By Business Process Management Of Sme In Batik Industry Indrianawati, Marranu, Nur Laily Empowering Indonesia’s Small Medium Enterprise Through The Development of Digital Economy Agusta Rizar Binadja, Mila Mumpuni Understanding Collective Problem-Solving in E-Commerce: Crowdsourcing As A Virtual Business Model Mahir Pradana An Application of Panel ARDL Approach in Management on the Values of Thailand's Dairy Import Prasert Chaitip, Fawikorn Inluang Can Indonesian SMEs Compete with their Partners in the ASEAN Economic Community? Roos K. Andadari, Meine Pieter van Dijk

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Chapter 4. Marketing issues on Global and Regional economies development The Role Of Motivation To Elaborate Information On The Intentions Of Tourists Visiting Mokhamad Adib Sultan, Tulus Haryono, Budhi Haryanto Service Information for Intention to buy with Groupon Application Viewed from Technology Readiness and Acceptance: Indonesia Evidence Margaretha Pink Berlianto, John Tampil Purba Increased customer loyalty with the use of customer relation management through Customer Satisfaction: A study in Assa Rent A Car in Jakarta, Indonesia Wasi Bagasworo Gender Effects on Customer Satisfaction towards Products and Service at a Local Café & Bistro in Bangsean, Chonburi Titiyoot Nuengchamnong, Sorrapakksorn Chatrakamollathas Pre-Flight Expectations in the Air Transportation Industry of South Africa: A Confirmatory Factor Analytical Approach Johan W de Jager, Tahir Jan

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Actual Economy: Local Solutions for Global Challenges 2016 Foreign Tourist’s Perception toward Visiting Thailand after Erawan Shrine Bombing Mahachai Sattayathamrongthian, Yingsak Vanpetch The influence factors of consumers acceptance Of organic food in Vietnam Ai Huu Tran Research consumers purchase behavior Towards green purchase intention Ai Huu Tran, Nhung Van Nguyen

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Chapter 5. Issues on modern industries development Policy Management in Transitive Economic Benefits for Small-scale Sugarcane Growers of the Sugarcane and Sugar Industry in Thailand Fawikorn Inluang, Prasert Chaitip Sugar Palm Centralization Area: A Strengthening Efforts to Develop Social Economic of Community Around The Conservation Forest in Kutai Kartanegara regency, Indonesia Triana Fitriastuti, Dhina Mustika Sari The Effect of Working Capital on Profitability Level at PT Ultrajaya Milk Industry & Trading Company Tbk, Indonesia Lorina Siregar Sudjiman The recommended policies designed to increase health inducing behavior for Thailand Kanchit Suknark, Jirakom Sirisrisakulchai, Songsak Sriboonchitta Climate Changes and Risk Analysis of Red Onion (Allium Ascolanicum) Farming: A Case from Nagari Saning Baka, Solok, West Sumatera Province, Indonesia Laily Fitriana, Rudi Febriamansyah, M. Refdinal, Hasnah Problem of Organic Food Purchase Intention: Case Study of Indonesian Consumer Santi Budiman, Tony Wijaya Building a Technology Triangle in Brooklyn: 5 key areas of focus Tucker Reed

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Chapter 6. Corporative management and staffing in international companies Changes In Human Resources Development In Implementation Of National System Of Qualifications Apenko Svetlana, Gileva Kristina Compensation Effect on the Performance of outsourcing Employee in STIE Ekuitas Roro Rachmawati, Ganjar Garibaldi The Role of Organizational Change Process And Organizational Culture in Indonesian Higher Education Strategic Change Jahja Hamdani Widjaja Enterprises Innovative Projects Personnel Potential In Conditions Of Globalization And International Professional Standards Apenko Svetlana, Romanenko Mikhail

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Actual Economy: Local Solutions for Global Challenges 2016 Organizational modernization competitiveness

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Denis Ushakov The Influence of CSR on Performance and Its Determinants in Listed Companies in Indonesia Taridi K Ridho The analysis of relationship between the ICT Diffusion and Regional Economic Growth: Evident from India Chukiat Chaiboonsri, Prasert Chaitip Consumer Based Brand Equity in Indonesia Geotourism Market (A Survey at Indonesian Geotourism Destination) Ayu Krishna Yuliawati, Agus Rahayu, Ratih Hurriyati Local Unique Resources Based Management And Its Effect On Advantage Agus Rahayu, Lili Adi WIbowo, Ayu Krishna Competency, motivation, and business performance: moderating effect of individual performance Rofi Rofaida, Suryana Capital Structure Determinants: Empirical Evidence From Indonesia Capital Market Maya Sari, Disman, Nugraha Food Cold Chin Transportation: Eastern Part of Thailand Adisak Suvittawat Influence Of Heroic Leadership And Positive Psychological Capital On Quality Of Work Life Of Mercu Buana University Employee Antonius Dieben Robinson Manurung, Alana Damaris, Nunni Widagdo Analysis Of Service Quality In Public Sector With Servqual Model Ayi Tejaningrum

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