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Do Financial Technology Firms Influence Labour Force Outcomes In Indonesian Banks?

Author

Listed:
  • Paresh Kumar Narayan

    (Monash University, Australia)

  • Dinh Hoang Bach Phan

    (La Trobe University, Australia)

Abstract

In this paper, we examined the influence of technology growth on labour outcomes. Using a sample of 37 Indonesian banks and data on Financial Technology (FinTech) firms from 1998 to 2017, we discovered that technology growth negatively influences the number of employees and positively impacts employee compensation. The role of technology in these labour market outcomes are both statistically and economically meaningful. Economically, for instance, with an increase of 1 standard deviation in the number of FinTech establishments, the number of Indonesian bank employees decreases by up to 2.30% of mean employees (equivalent to 58 employees) and employee compensation improves by up to 17.83% of mean compensation (equivalent to US$1,830). Furthermore, we showed that bank characteristics affect technology growth–labour outcomes relation. The effect of technology growth on labour outcomes is stronger for banks that have a bigger market value, are more mature, and are private.

Suggested Citation

  • Paresh Kumar Narayan & Dinh Hoang Bach Phan, 2023. "Do Financial Technology Firms Influence Labour Force Outcomes In Indonesian Banks?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 26(4), pages 587-606, November.
    • Handle: RePEc:idn:journl:v:26:y:2023:i:4c:p:587-606
    DOI: https://doi.org/10.59091/2460-9196.1725
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    References listed on IDEAS

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    1. Yinqiao Li & Renée Spigt & Laurens Swinkels, 2017. "The impact of FinTech start-ups on incumbent retail banks’ share prices," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 3(1), pages 1-16, December.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Technology growth; Labour outcome; Banks; Indonesia;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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