Social capital is essential in mediating financial inclusion. We employ broader horizontal and vertical social engagement of social capital such as bonding, bridging and linking. Meanwhile, financial inclusion is defined as saving ownership in a formal financial institution. Using a logistic regression model and a sample of 74,454 individual respondents from the 2018 National Socioeconomic Survey, we found that social capital is essential in promoting formal saving behavior. Among three indicators (bonding, bridging, and linking), the results show that a rise in the bridging variable was associated with a 10 per cent higher likelihood of having a formal savings, higher in magnitude than the linking variable. Bonding variable had no effect in promoting financial inclusion, but upon further observation, it was still suitable to be implemented in rural area. Our estimates justified the presence of financial information transmission among people in their respective social circles. Our findings suggest that the government should consider a financial campaign using a community-based approach to complement the current inclusion strategy.JEL Classification: D14; G41; O17
Common Value Theory points out the situation in financial instrument auction where investors tend to bid a lower price than the actual value and it results in an underpricing of financial instrument. The underpricing, further, may hamper the market as it leads to revenue loss for the company. As the Islamic financial market developed, government of Indonesia expands their instrument variations and started to issue Islamic Bond (sukuk) in 2008. There is still lack of empirical literature relating to sukuk pricing performance although sukuk has several distinct features such as the existence of underlying asset. This paper attempts to examine the underpricing indication in sukuk issuance during 2012-2016 and analyze the factors that might explain its persistence. To examine the existence of sukuk underpricing issuance, this study uses yield spread from weighted average yield when auction and market yield when auction. To this end, Ordinary Least Square model is applied to analyze the determinants of underpricing. In contrast to the theory, the result shows that average sukuk issuance in Indonesia indicates a higher market yield than weighted average yield when auction.
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