The Impact of Bank Development on Indonesian Districts’ Economic Growth and Poverty Alleviation
Year: 2024
Type: article
Abstract: This study investigates the conventional and Indonesian Islamic banks’intermediary role in enhancing economic growth and reducing poverty in 33 Indonesian districts during 2012–2020. Data panels were examined by fixed-effect analysis and cross-sectional effect. This study found that, compared to Islamic bank offices, the number of conventional bank offices has a greater effect on Indonesian GDP, while Islamic banks have an essential role in reducing poverty. Conventional bank financing positively affects economic growth and poverty alleviation. Islamic bank deposits have a strong correlation to Indonesian districts’ economic growth and poverty. Meanwhile, conventional bank deposits have a greater effect on reducing poverty than GDP. Therefore, conventional and Islamic banks have a crucial role in enhancing economic growth and solving income inequality in the domestic context. This study contributes to economic literature with a practical and local government decision-making process through developing and testing a model of economic growth and poverty determinants and offers new insights into the determinants of bank principles in a financial system.
Authors: Zakaria, Junaiddin, Junaidi, Junaidi
Institutions: Universitas Muslim Indonesia, Universitas Muhammadiyah Palopo
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7215463974