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adhering to it Previous studies that learn about how
important government in economic activity, for
example, The influence of government policy in the
economy is also found by Borisova and Yadaf (2015)
that state-owned companies have a better-informed
opportunity than private-owned firms so that they
have a higher chance of trading activities because the
state-owned enterprises are low risk. Government
policies also contribute to the company's performance
through various instruments such as taxes and
subsidies and monopoly or cartel policies.
Government policy can shape the market structure
and in turn determines the level of corporate
competition and includes the bank (Eaton, 1984). On
the consumer side government policies also impact on
their behavior as described by Hsu, Lee and Wang
(2017) that the willingness to pay consumers for
pollution product products is changing as Taiwanese
environmental policies change.
The government's role in banking activities has
often been investigated, for example, Ahmad and
Hassan (2007) investigating the weakness of
Bangladesh government policies that have not been
optimal in boosting the progress of Islamic banks, ie
the policy in the country still equates to conventional
banks and Islamic banks. Arif (2014) points out the
purpose of his research is to test a spin-off policy
based on the Sharia Banking Law. 21/2008 will have
an impact on third-party funds in the sharia banking
industry in Indonesia. The results show that all
independent variables have an impact on third-party
funds in Indonesia's sharia banking industry. The
implication of this result is that spin-off policies have
a good impact on the growth of third-party funds in
the Indonesian sharia banking industry.
Other experts such as Francis and Osborne
(2012) indicated that the regulation on the adequacy
of capital in the UK affects the amount of capital and
the amount of slow financing in the UK compared
with the number of fast financing in the UK. The
Muslim government's policy of Islamic banking has
also been investigated by Isik and Hasan (2003)
which describes that banking liberalization policy in
Turkey has an impact on the market structure of
Turkish banking industry, before the liberalization,
the banking market in Turkey is oligopoly and
changing into the perfect competition. Whereas in
Indonesia the support of the Indonesian government
was reached through the Indonesian Muslim
Intellectual Association (Ikatan Cendekiawan
Muslim Indonesia) as the initiator of the first Islamic
bank in Indonesia and the Indonesian Council of
Ulama as the legal body of lawyer operationalization
of Islamic banking activities in Indonesia
(Choiruzzad and Nugroho, 2013).
Encouragement and Support for Islamic banks in
Indonesia continue to this day, and the policy of
seizing the attention of the public is the issuance of
the Regulation on Banks Receiving Funds for Hajj
Deposit is Islamic Bank. The purpose of this study is
whether the policy is effective and how far the impact
of the policy on the third party funds of conventional
banks and Islamic banks in Indonesia and tested
whether after the government policy there is a transfer
of haj funds (which is part of third-party funds) from
conventional banks to Islamic banks.
2 METHODS
There are four basic procedures in this paper. First,
collected data from bank financial reports and
literature review. Second, we have analysis based on
descriptive statistics. Third, based on Difference-in-
differences (DiD) analysis. Fourth, comparing the
result from DiD analysis and related literature. DiD
method is a tool to estimate treatment effects
comparing the pre- and post- treatment differences in
the outcome of a treatment and a control group. In this
research pre-treatment is third-party fund (DPK)
panel data, observed from 2011-2013, before
Ministry of Religion gives instruction for moving hajj
fund to Islamic bank. Post-treatment for this research
is DPK panel data, observed from 2014-2016, after
Ministry of Religion gives instruction for moving hajj
fund to Islamic bank. DiD illustrated in Figure 1.
Figure 1: Graphical Illustration for DiD.
If we consider Figure 1, control group is DPK for
conventional bank, and treatment group is DPK for
Impact of Government Policy on Hajj Funds Transfer on Conventional Bank and Islamic Bank Third Party Funds in Indonesia: Difference in
Difference Approach
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