The effect of social performance on financial performance by the composition of third-party funds as an intervening variable

Harahap, Darwis (2023) The effect of social performance on financial performance by the composition of third-party funds as an intervening variable. At-Tijaroh: Jurnal Ilmu Manajemen dan Bisnis Islam, 9 (1). pp. 10-24. ISSN 2356-492X

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Abstract

The background of the problem in this study is due to the incompatibility of the theory with the phenomenon that occurs in Sharia commercial banks where the theory states that if the social performance of Islamic banking increases, financial performance must also increase, but what happens to Islamic banks in 2021 are not in accordance with existing theory. The formulation of the problem in this study is whether the composition of third-party funds effectively mediates the influence of social performance on finance in Islamic banking. The purpose of this study is to determine the composition of third-party funds to effectively mediate the influence of social performance on financial performance in Islamic banking. This type of research is quantitative research obtained from financial statements contained on the Financial Services Authority (OJK) website and on the company's financial statement site. This research was conducted in the Islamic banking financial industry. The data analysis techniques used are Outer Model Value Evaluation, Inner Model Value Evaluation, and Effect Test Evaluation. This study uses structural equation modeling analysis techniques with the help of path analysis/PLS 3.0 processing tools. Based on the results of this study, the Direct Effect test can be concluded that the Social Performance variable has no effect on the Financial Performance of Islamic Banking in Indonesia. Based on the results of the Direct Effect testing research, it can be interpreted that the Social Performance variable has no effect on Financial Performance and also the composition of third-party Islamic banking in Indonesia as evidenced by the results of the T-count <1.96 and probability <5%. then, the composition of third party funds has no influence that can mediate the effect of social performance on the financial performance of Islamic banks in Indonesia. This is also evidenced by the results of the Indirect Effect Test showing T-count <1.96 and probability <5%.

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