IDEAS home Printed from https://ideas.repec.org/a/eme/ijsepp/ijse-05-2019-0292.html
   My bibliography  Save this article

The adoption of digital technology and labor demand in the Indonesian banking sector

Author

Listed:
  • Armida Salsiah Alisjahbana
  • Maman Setiawan
  • Nury Effendi
  • Teguh Santoso
  • Baruna Hadibrata

Abstract

Purpose - This study investigates the effect of digital technology adoption on labor demand in the Indonesian banking sector. Design/methodology/approach - This research uses bank-level survey data obtained from the Indonesia Financial Service Authority (OJK) for the period 2010–2017 using semiannual data. This research applies a panel data method using a fixed effect model. Findings - This study results show that technology adoption affects labor demand significantly in all Commercial Bank Based on Business Activities (BUKU) levels of banks. Technology adoption tends to be a substitute for labor in BUKU I, BUKU II and BUKU III banks in the support and business units. In addition, technology adoption complements labor only in the business unit in BUKU IV banks. Research limitations/implications - This research uses a sample of only 40 banks at the regulatory levels of BUKU I, BUKU II, BUKU III and BUKU IV. These 40 banks account for more than 80% of the assets in the Indonesian banking sector. Originality/value - Literature investigating the effect of the adoption of digital technology on labor demand in the banking sector is still rare in the Indonesian economy. Most of the previous research limited its area of study to the manufacturing industry. This research makes a vital contribution in measuring the adoption of digital technology and its effect on labor demand in the banking sector using the BUKU level classifications of banks.

Suggested Citation

  • Armida Salsiah Alisjahbana & Maman Setiawan & Nury Effendi & Teguh Santoso & Baruna Hadibrata, 2020. "The adoption of digital technology and labor demand in the Indonesian banking sector," International Journal of Social Economics, Emerald Group Publishing, vol. 47(9), pages 1109-1122, August.
  • Handle: RePEc:eme:ijsepp:ijse-05-2019-0292
    as

    Download full text from publisher

    File URL: http://www.emeraldinsight.com/10.1108/IJSE-05-2019-0292?utm_campaign=RePEc&WT.mc_id=RePEc
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Technology adoption; Indonesian banking sector; Labor demand; Digital technology; A10; G20; O14;

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

    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:eme:ijsepp:ijse-05-2019-0292. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman). General contact details of provider: http://www.emeraldinsight.com .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.