Financial Sustainability in Emerging Markets: An Investigation of Determinants in the Pension Fund Companies
Abstract
The major goal of this article is to pinpoint the variables affecting the financial sustainability of pension fund companies that comprise emerging markets. The pension fund company data comes from Indonesia and was registered with the Indonesia Financial Service Authority (OJK) in 2020–2022. The sample was obtained using a purposive sampling method, which resulted in 14 pension fund companies. This quantitative research was done using a descriptive statistical approach. The data analysis technique used is regression analysis with Ordinary Least Square. The findings of this study support hypothesis 2 (H2), which states that there is a partial positive influence between the liquidity variable and finance sustainability. Meanwhile, efficiency (H1) and profitability (H3) do not affect financial sustainability. This study also reveals that the combination of efficiency, liquidity, and profitability variables simultaneously (H4) has a greater impact on financial sustainability than their partial effect on pension fund companies in Indonesia.
Keywords: efficiency, financial sustainability, liquidity, pension fund companies, profitability
References
[1] Financial Stability Board and F. S. Board. “Global monitoring report on non-bank financial intermediation 2018,” Financ. Stab. Board, no. February, pp. 1–94, 2021, [Online]. Available: www.fsb.org/emailalert
[2] Mata MN, Shah SS, Sohail N, Correira AB. The Effect of Financial Development and MFI’s Characteristics on the Efficiency and Sustainability of Micro Financial Institutions. Economies. 2023;11(3):1–16.
[3] Banto JM, Monsia AF. Microfinance institutions, banking, growth and transmission channel: A GMM panel data analysis from developing countries. Q Rev Econ Finance. 2021;79:126–50.
[4] Keuangan OJ, Dana A, Indonesia P, Dana P, Lembaga P. “Roadmap pengembangan dana pensiun indonesia 2023-2027,” Otoritas Jasa Keuang., 2023, [Online]. Available: https://ojk.go.id/id/regulasi/otoritas-jasa-keuangan/rancanganregulasi/ Pages/Roadmap-Industri-Keuangan-Nonbank-Periode-2023-2027.aspx
[5] The Indonesia Financial Service Authority (OJK). “Direktori Dana Pensiun,” OJK. https://ojk.go.id/id/kanal/iknb/data-dan-statistik/direktori/dana-pensiun/default.aspx (accessed Nov. 01, 2023).
[6] Paramita RW. “Accounting Earning Response Coefficient Pengukuran Kualitas Laba Akuntansi,” Ed. Pertama. Press Widyagama, Lumajang, 2020.
[7] Semaw Henock M. Financial sustainability and outreach performance of saving and credit cooperatives: the case of Eastern Ethiopia. Asia Pacific Manag. Rev. 2019;24(1):1–9.
[8] Ghebregiorgis F, Atewebrhan A. Measurement Of Bank Profitability, Risk And Efficiency: The Case Of The Commercial Bank of Eritrea and Housing and Commerce Bank of Eritrea. Afr J Bus Manag. 2016;10(22):554–62.
[9] Gill A, Singh M, Mathur N, Mand HS. The Impact of Operational Efficiency on the Future Performance of Indian Manufacturing Firms. Int J Econ Finance. 2014;6(10):259–69.
[10] Firlana A, Irhan F. Pengaruh Ukuran Perusahaan, Profitabilitas Dan Likuiditas Terhadap Kebijakan Dividen Dan Nilai Perusahaan Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia [Online,. Available: http:jim.unsyiah.ac.id/ekm]. J. Ilm. Mhs. Ekon. Manaj. 2020;5(1):62–81.
[11] Ludianingsih A, Wiyono G, Kusumawardhani R. Pengaruh Profitabilitas, Likuiditas, Ukuran Perusahaan dan Keputusan Investasi Terhadap Nilai Perusahaan: Studi pada Bank yang Terdaftar di BEI Tahun 2018-2020. Relig. Educ. Soc. Laa Roiba J. 2022;4(3):437–46.
[12] Anissa Ulfianti Murti EP. “Pengaruh profitabilitas, likuiditas, leverage,dan ukuran perusahaan terhadap nilai perusahaan,” Fair Value J. Ilm. Akunt. dan Keuang., vol. 5, no. 2, pp. 1012–1019, 2022, [Online]. Available: https://journal.ikopin.ac.id/index.php/fairvalue/article/view/2135/2007
[13] Pambudi SG, Meini Z. The Effects Of Profitability, Liquidity And Firm Size On Firm Value, With Sustainability Report As The Moderating Variable [Online,. Available: http://ejournal.seaninstitute.or.id/index.php/Ekonomi]. J. Ekon. 2023;12(01):2023.
[14] Li Y, Mohd Ashhari Z, Fan Y. Financial sustainability and capital leverage of microfinance institutions in China: the mediating role of profitability. Cogent Econ Finance. 2022;10(1):2153411.
[15] Siregar B. The Effect of Profitability, Liquidity, and Solvency on Sustainable Reporting with Corporate Governance as Moderating Variable. J. Int. Conf. Proc. 2022;5(3):79– 87.
[16] Misztal A. “Profitability, financial liquidity and the sustainable development of manufacturing enterprises in Poland,” Stud. Prawno-Ekonomiczne. 2022;125:121– 39.
[17] S. Junaidi, S. Sulastri, I. Isnurhadi, and M. Adam, “Liquidity, asset quality, and efficiency to sustainable growth rate for banking at Indonesia Stock Exchange,” J. Keuang. dan Perbank., vol. 23, no. 2, pp. 308–319, 2019, https://doi.org/10.26905/jkdp.v23i2.2699..
[18] Henseler J, Ringle CM, Sarstedt M. A new criterion for assessing discriminant validity in variance-based structural equation modeling. J Acad Mark Sci. 2015;43(1):115–35.
[19] Gujarati DN, Porter DC. Basic Econometrics. 6th ed. McGraw-Hill Educ; 2018.
[20] Jiang H, Xu S, Cui J, Subhani G. The impact of bank capital, liquidity and funding liquidity on sustainable bank lending: evidence from MENA region. Econ Anal Policy. 2023;79:713–26.
[21] Kusna I, Setijani E. Analisis Pengaruh Kinerja Keuangan, Growth Opportunity Dan Ukuran Perusahaan Terhadap Struktur Modal Dan Nilai Perusahaan. J. Manaj. Dan Kewirausahaan. 2018;6(1):93–102.
[22] Sunarka D, Hartiyah S, Putranto A. Pengaruh Analisis Laporan Keuangan Return On Investment, Efisiensi Biaya Operasional, Efisiensi Biaya Investasi, Rasio Kecukupan Dana dan Likuiditas Terhadap Kinerja Keuangan Dana Pensiun Tambi(Studi Kasus Pada Dana Pensiun Tambi Periode 2011 Sampai 2018). J. Econ. Bus. Eng. 2019;1(1):175–82.
[23] Olmo BT, Saiz MC, Azofra SS. Sustainable banking, market power, and efficiency: effects on banks’ profitability and risk. Sustainability (Basel). 2021;13(3):1–23.
[24] Aydoğmuş M, Gülay G, Ergun K. Impact of ESG performance on firm value and profitability. Borsa Istanbul Rev. 2022;22:S119–27.