Work

Short-Term and Long-Term Effects of the Islamic Bank Financing in Construction Sector on GDP in Indonesia

Year: 2024

Type: article

Abstract: Research on the role of Islamic banks on economic growth has been widely conducted. However, it focuses on total Islamic Bank Financing (IBF) rather than on sector-specific Islamic financing. This research addresses the gap by examining the short-term and long-term influence of Islamic bank financing in the construction sector on the Gross Domestic Product (GDP) in Indonesia. This research uses a quantitative approach, using the Conditional Error Correction Model (CECM) analysis method. Secondary data used in this research are from the first semester of 2006 to the first semester of 2023 and are taken and processed from related official institutions such as Bank Indonesia, the Central Statistics Agency, and the Financial Services Authority. In the autoregressive distributive lag (ARDL) model in the construction sector, IBF’s short-term impact on GDP is positive but insignificant, while the long-term effect is significantly positive.

Source: The Journal of Muamalat and Islamic Finance Research

DOI: 10.33102/jmifr.572

Authors: Eko Fajar Cahyono, Nur Syazwani Mazlan, Mohd Naseem Niaz Ahmad, Wan Azman Saini Wan Ngah, Azali Mohamed

Institutions: Universitas Airlangga, Monash University Malaysia, Universiti Putra Malaysia, Universiti Keusahawanan Koperasi Malaysia

Language: English

Topic: Islamic Finance and Banking Studies

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: diamond

Funder: Universiti Putra Malaysia