IDEAS home Printed from https://ideas.repec.org/a/idn/journl/v26y2023i4cp587-606.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: https://bulletin.bmeb-bi.org/cgi/viewcontent.cgi?article=1725&context=bmeb
    Download Restriction: no

    File URL: https://libkey.io/https://doi.org/10.59091/2460-9196.1725?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Stoneman, Paul & Kwon, Myung Joong, 1996. "Technology Adoption and Firm Profitability," Economic Journal, Royal Economic Society, vol. 106(437), pages 952-962, July.
    2. 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.
    3. Aldatmaz, Serdar & Ouimet, Paige & Van Wesep, Edward D, 2018. "The option to quit: The effect of employee stock options on turnover," Journal of Financial Economics, Elsevier, vol. 127(1), pages 136-151.
    4. Chen, Chaoran, 2020. "Technology adoption, capital deepening, and international productivity differences," Journal of Development Economics, Elsevier, vol. 143(C).
    5. Rayton, Bruce A., 2003. "Firm performance and compensation structure: performance elasticities of average employee compensation," Journal of Corporate Finance, Elsevier, vol. 9(3), pages 333-352, June.
    6. Anna Giunta & Francesco Trivieri, 2007. "Understanding the determinants of information technology adoption: evidence from Italian manufacturing firms," Applied Economics, Taylor & Francis Journals, vol. 39(10), pages 1325-1334.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Phan, Dinh Hoang Bach & Narayan, Paresh Kumar & Rahman, R. Eki & Hutabarat, Akhis R., 2020. "Do financial technology firms influence bank performance?," Pacific-Basin Finance Journal, Elsevier, vol. 62(C).
    2. Mohamed Kossaï & Maria Luiza Lapa Souza & Younes Ben Zaied & Pascal Nguyen, 2020. "Determinants of the Adoption of Information and Communication Technologies (ICTs): the Case of Tunisian Electrical and Electronics Sector," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(3), pages 845-864, September.
    3. Vu Linh Toan Le & Tien Hoang Nguyen & Khanh Duy Pham, 2023. "What Drives Industry 4.0 Technologies Adoption? Evidence from a SEM-Neural Network Approach in the Context of Vietnamese Firms," Sustainability, MDPI, vol. 15(7), pages 1-32, March.
    4. Fındık, Derya & Tansel, Aysit, 2013. "Resources on the stage: a firm level analysis of the ict adoption in Turkey," MPRA Paper 65956, University Library of Munich, Germany, revised 05 Aug 2014.
    5. Áron TÖRÖK & József TÓTH, 2013. "Open characters of innovation management in the Hungarian wine industry," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 59(9), pages 430-438.
    6. Bentivoglio, Deborah & Bucci, Giorgia & Belletti, Matteo & Finco, Adele, 2022. "A theoretical framework on network’s dynamics for precision agriculture technologies adoption," Revista de Economia e Sociologia Rural (RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 60(4), January.
    7. Yunhee Kim & Jae Young Choi & Yeonbae Kim, 2009. "Complementarity and Contextuality in the Adoption of Information Systems in Korean Firms," TEMEP Discussion Papers 200919, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Oct 2009.
    8. Rajiv Kohli & Sarv Devaraj, 2003. "Measuring Information Technology Payoff: A Meta-Analysis of Structural Variables in Firm-Level Empirical Research," Information Systems Research, INFORMS, vol. 14(2), pages 127-145, June.
    9. Luigi Benfratello & Tiziano Razzolini & Alessandro Sembenelli, 2009. "Does ICT Investment Spur or Hamper Offshoring? Empirical Evidence from Microdata," Working papers 05, Former Department of Economics and Public Finance "G. Prato", University of Torino.
    10. Uwizeyemungu, Sylvestre & Poba-Nzaou, Placide & St-Pierre, Josée, 2022. "Back-end information technology resources and manufacturing SMEs’ export commitment: An empirical investigation," International Business Review, Elsevier, vol. 31(5).
    11. Eleonora Bartoloni & Maurizio Baussola, 2015. "Persistent Product Innovation and Market-oriented Behaviour: the Impact on Firms' Performance," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1505, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    12. Marijn A. Bolhuis & Swapnika R. Rachapalli & Diego Restuccia, 2021. "Misallocation in Indian Agriculture," NBER Working Papers 29363, National Bureau of Economic Research, Inc.
    13. Mughal, Mazhar & Diawara, Barassou, 2011. "Human capital and the adoption of information and communications technologies: Evidence from investment climate survey of Pakistan," Economics Discussion Papers 2011-21, Kiel Institute for the World Economy (IfW Kiel).
    14. Tasso Adam & Loren Brandt & Chaoran Chen & Diego Restuccia & Xiaoyun Wei, 2024. "Land Security and Mobility Frictions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(3), pages 1941-1987.
    15. Delera, Michele & Pietrobelli, Carlo & Calza, Elisa & Lavopa, Alejandro, 2022. "Does value chain participation facilitate the adoption of Industry 4.0 technologies in developing countries?," World Development, Elsevier, vol. 152(C).
    16. Fuentelsaz, Lucio & Gómez, Jaime & Palomas, Sergio, 2016. "Interdependences in the intrafirm diffusion of technological innovations: Confronting the rational and social accounts of diffusion," Research Policy, Elsevier, vol. 45(5), pages 951-963.
    17. Saba Firdousi, 2016. "Technology in the Sialkot Gloves Manufacturing Sector," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 253-272, September.
    18. Chaoran Chen & Diego Restuccia & Raül Santaeulàlia-Llopis, 2023. "Land Misallocation and Productivity," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(2), pages 441-465, April.
    19. Susanna Wolf & Shyamal Chowdhury, 2003. "Use of ICTs and the Economic Performance of SMEs in East Africa," WIDER Working Paper Series DP2003-06, World Institute for Development Economic Research (UNU-WIDER).
    20. Adel Ben Youssef & Leila Peltier- Ben Aoun, 2015. "nformation and Communication Technologies: Their Use and Short and Long Run Effects," Economics Bulletin, AccessEcon, vol. 35(3), pages 1550-1562.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:idn:journl:v:26:y:2023:i:4c:p:587-606. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lutzardo Tobing The email address of this maintainer does not seem to be valid anymore. Please ask Lutzardo Tobing to update the entry or send us the correct address or Jimmy Kathon (email available below). General contact details of provider: https://edirc.repec.org/data/bigovid.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.