The Contribution of Islamic Banking to Indonesia's Economic Growth : the Evidence from the Vector Error Correction and Variance Decomposition Methods

• Autorzy: Nurhastuty Kesumo Wardhany , Shaista Arshad
• Języki publikacji: EN

Abstrakty

EN

Purpose: The aim of this study is to empirically understand whether Islamic banks have a positive relationship to economic growth in Indonesia.

Methodology: This study examines the causal relationship amongst several selected variables: real GDP (RY), total deposit (TD), the change in the Consumer Price Index as an inflation proxy (INF), and the ratio of total imports and exports to nominal GDP (OE). In order to accomplish the research objectives of this study, a time series quarterly data spanning from the first quarter of 2003 to the last quarter of 2011 comprising of 36 data points has been used to perform an effective analysis.

Findings: The inference deduced here is twofold; First Islamic banks in Indonesia are still unable to contribute significantly to Indonesia's economic growth. Second, the relationship between Islamic banks and economic growth in Indonesia is positively but weakly correlated.

Research Limitations: For this time series research, the researcher is limited by the small amount of data (2003.Q1 to 2011.Q4). (original abstract)

Słowa kluczowe

EN

Economic growth; Islamic banking; Vector error correction model (VECM)

PL

Wzrost gospodarczy; Bankowość islamska; Model wektorowej korekty błędem

• Czasopismo: Management and Business Administration. Central Europe
• Rocznik: 2015
• Tom: 23
• Numer: nr 3
• Strony: 89--104

Twórcy

autor

Nurhastuty Kesumo Wardhany

• Universitas Trisakti, Indonesia

autor

Shaista Arshad

• INCEIF, Postgraduate Student

Bibliografia

• Ajija, Setianto and Hudaifah (2010). The Contribution of Islamic Banking and Financial Institutions (IBFIs) on the Indonesian Economic Growth: The Evidence from the ARDL Bound Testing Approach. Forum Riset Perbankan Syariah II Bank Indonesia Papers. 1: 1-25.
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• Bank Indonesia. Indonesian Islamic Banking Outlook 2011.
• Bank Indonesia. Indonesia Banking Statistics. Jakarta: Bank Indonesia.
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• Indonesian Financial Statistics or Statistik Ekonomi Keuangan Indonesia http://www.bps.go.id/. Levine, R., Loayza, N. and Beck, T. (2000) Financial intermediation and growth: Causality and causes. Journal of Monetary Economics, 46: 31-77, http://dx.doi.org/10.1016/S0304-3932(00)00017-9
• Levine, R. (2004). Finance and Growth: Theory and Evidence.Handbook of Economic Growth Carlson School of Management. University of Minnesota and the NBER.
• Masih, Mansur, Al-Elg, Ali. and Madani, H. (2010). Causality between financial development and economic growth: an application of vector error correction and variance decomposition methods to Saudi Arabia. Applied Economics, 41(13): 1691-1699, http://dx.doi.org/10.1080/00036840701320233
• Monzerkahf (1999). Islamic Bank at the Threshold of the Third Millenium. Thunderbird International Business Review, 41: 445-460.
• Pesaran, M.H. and Shin, Y. (2002). Long-run structural modelling. Econometric Reviews, 21: 49-87, http://dx.doi.org/10.1081/ETC-120008724

Identyfikatory

DOI

10.7206/mba.ce.2084-3356.152