Proceedings of the 4th International Conference of Economics, Business, and Entrepreneurship, ICEBE 2021, 7 October 2021, Lampung, Indonesia

Research Article

Improving Performance and Generating Competitive Advantage of Rural Banks: Do Coopetition and Capital Requirement Matter?

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  • @INPROCEEDINGS{10.4108/eai.7-10-2021.2316219,
        author={Harmani  Harun and Rika  Mulia and Muslim Abdul Djalil},
        title={Improving Performance and Generating Competitive Advantage of Rural Banks: Do Coopetition and Capital Requirement Matter?},
        proceedings={Proceedings of the 4th International Conference of Economics, Business, and Entrepreneurship, ICEBE 2021, 7 October 2021, Lampung, Indonesia},
        publisher={EAI},
        proceedings_a={ICEBE},
        year={2022},
        month={4},
        keywords={rural bank coopetition leverage capital requirement competitive advantage business performance},
        doi={10.4108/eai.7-10-2021.2316219}
    }
    
  • Harmani Harun
    Rika Mulia
    Muslim Abdul Djalil
    Year: 2022
    Improving Performance and Generating Competitive Advantage of Rural Banks: Do Coopetition and Capital Requirement Matter?
    ICEBE
    EAI
    DOI: 10.4108/eai.7-10-2021.2316219
Harmani Harun1,*, Rika Mulia2, Muslim Abdul Djalil3
  • 1: Universitas Malahayati
  • 2: UIN Ar-Raniry
  • 3: Universitas Syiah Kuala
*Contact email: harmani.jkt24@gmail.com

Abstract

The increasing of small, micro, and medium enterprises; large low-income communities are relatively unaffordable by commercial finance institutions, generating growth of microfinance institutions. Rural banks (Bank Perkreditan Rakyat – BPRs) have been serving those markets for years. This study analyzes coopetition leverage and capital requirement in determining their competitiveness and performance. The respondents were 280 employees in Aceh, Indonesia. The structural equation modelling analysis was used. There is a positive influence of the coopetition leverage and capital requirement towards competitive advantage and business performance. The study also found that the competitive advantage in mediating the effect of coopetition leverage and capital requirements on performance is said to be partial mediation. These findings suggest that BPRs could use the opportunity by building coopetition with the other banks or fintech companies and maximizing their capital to reach the competitive advantage for their sustainability, applying better-modified strategies to survive and improve performance.