An Empirical Analysis of The Impact of Islamic Banking on Real Output in Indonesia
DOI:
https://doi.org/10.21580/economica.2020.11.2.4079Keywords:
Islamic Banking, Sharia Deposit, Sharia Financing, Inflation, GDPAbstract
Abstract: The role and contribution of Islamic finance on economic growth in Indonesia has increased gradually and steadily. This is because the Islamic economy's universal and comprehensively basic principle is the primary foundation of Islamic banking. This research aimed to analyze the role of Islamic Banking on Indonesia's real sector during 2007.01 – 2016.04. This study used the Vector Error Correction Model (VECM) as a tool to analyze secondary data. The result showed that in Indonesia, sharia deposit positively and significantly influenced actual output in the short term. In addition, in the long-term, sharia financing positively and significantly influenced actual output. Moreover, Granger Causality Test proved the occurrence of one-way causality between actual output and inflation. Thus, Islamic banking can encourage actual output in Indonesia. The results of this study become a consideration for stakeholders and policymakers to pay more attention to strategies and policies that support economic growth in Indonesia.
Abstrak: Perkembangan keuangan syariah di Indonesia semakin meningkat setiap tahunnya. Prinsip-prinsip dasar ekonomi syariah yang universal dan komprehensif merupakan landasan utama perbankan syariah. Tujuan penelitian ini untuk menginvestigasi peran perbankan syariah terhadap sektor riil di Indonesia selama periode 2007.01 – 2016.04. Penelitian ini menggunakan Vector Error Correction Model (VECM) sebagai alat untuk menganalisis data sekunder. Hasil penelitian menemukan bahwa dalam jangka pendek deposito syariah berpengaruh positif dan signifikan terhadap output rill. Selain itu, dalam jangka panjang pembiayaan syariah berpengaruh positif dan signifikan terhadap output riil di Indonesia. Lebih lanjut, Uji Kausalitas Granger membuktikan terjadinya kausalitas satu arah antara output riil dan inflasi. Dengan demikian, perbankan syariah mampu mendorong output riil di Indonesia. Hasil penelitian ini menjadi bahan pertimbangan bagi para pemangku kepentingan dan pengambil kebijakan untuk lebih memperhatikan strategi dan kebijakan yang mendukung pertumbuhan ekonomi di Indonesia.
Downloads
References
Abduh, Muhamad, Said Brahim, and Mohd Azmi Oma. 2012. “A Study on Finance-Growth Nexus in Dual Financial System Countries: Evidence from Bahrain.” World Applied Sciences Journal 20 (8): 1166–74. https://doi.org/10.5829/idosi.wasj.2012.20.08.2027.
Abu-Bader, Suleiman, and Aamer S Abu-Qarn. 2008. “Financial Development and Economic Growth: Empirical Evidence from Six MENA Countries.” Review of Development Economics 12 (4): 080414152145312-??? https://doi.org/10.1111/j.1467-9361.2008.00427.x.
Amiruddin, Rosilawati, Abu Hassan Shaari Mohd Nor, and Ismadi Ismail. 2007. “Test FOR Dynamic Relationship between Financial Development and Economic Growth in Malaysia: A Vector Error Correction Modeling Approach.” Gadjah Mada International Journal of Business 9 (1): 61. https://doi.org/10.22146/gamaijb.5605.
Arac, Aysen, and Suleyman Kutalmis Ozcan. 2014. “The Causality Between Financial Development and Economic Growth: The Case of Turkey.” Journal of Economic Cooperation and Development 35 (23): 171–98.
Bakar, Hamad Omar, and Zunaidah Sulong. 2018. “The Role of Financial Sector on Economic Growth: Theoretical and Empirical Literature Reviews Analysis.” Journal of Global Economics 06 (04). https://doi.org/10.4172/2375-4389.1000309.
Beck, Thorsten, Asli Demirgüç-Kunt, and Ouarda Merrouche. 2013. “Islamic vs. Conventional Banking: Business Model, Efficiency and Stability.” Journal of Banking & Finance 37 (2): 433–47. https://doi.org/10.1016/j.jbankfin.2012.09.016.
Carby, Yanique, Roland Craigwell, Allan Wright, and Anthony Wood. 2012. “Finance and Growth Causality: A Test of the Patrick’s Stage-of-Development Hypothesis.” International Journal of Business and Social Science 3 (21).
Christianto Leasiwal, Teddy. 2013. “The Analysis Of Indonesia Economic Growth: A Study In Six Big Islands In Indonesia.” Journal of Economics, Business, and Accountancy | Ventura 16 (1): 1–12. https://doi.org/10.14414/jebav.v16i1.121.
Datta, Kanchan, and Chandan Kumar Mukhopadhyay. 2011. “Relationship Between Inflation and Economic Growth in Malaysia: An Econometrics Review.” International Conferences on Economics and Finance Research 4: 415–19.
Dularif, Muh. 2010. “Financial Development and Economic Growth: An Empirical Analysis of Indonesia.” Jurnal BPPK 1 (4).
El-Gamal, M A. 2006. Islamic Finance Law,Economics, and Practice. Cambridge University Press.
Fitri, Maltuf. 2015. “Prinsip Kesyariahan Dalam Pembiayaan Syariah.” Economica: Jurnal Ekonomi Islam 6 (1): 57–70. https://doi.org/10.21580/economica.2015.6.1.786.
Fritsch, Michael. 2017. “The Theory of Economic Development – An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle.” Regional Studies 51 (4): 654–55. https://doi.org/10.1080/00343404.2017.1278975.
Furqani, Hafaz, and Ratna Mulyani. 2009. “Islamic Banking and Economic Growth: Empirical Evidence from Malaysia.” Journal of Economic Cooperation and Development, 59–74.
Gupta, Priya, and Archana Singh. 2016. “Causal Nexus between Foreign Direct Investment and Economic Growth: A Study of BRICS Nation Using VECM and Granger Causality Test.” Journal of Advances in Management Research 13 (2): 179–202.
Hasan, Maher, And Jemma Dridi. 2011. “The Effects Of The Global Crisis On Islamic And Conventional Banks: A Comparative Study.” Journal of International Commerce, Economics and Policy 02 (02): 163–200. https://doi.org/10.1142/S1793993311000270.
Hossain, Akhand Akhtar. 2016. “Inflationary Shocks and Real Output Growth in Nine Muslim-Majority Countries: Implications for Islamic Banking and Finance.” Journal of Asian Economics 45 (August): 56–73. https://doi.org/10.1016/j.asieco.2016.06.004.
Inggrid. 2006. “Sektor Keuangan Dan Pertumbuhan Ekonomi Di Indonesia: Pendekatan Kausalitas Dalam Multivariate Vector Error Correction Model (Vecm).” Jurnal Manajemen Dan Wirausaha 8 (1): 40–50. https://doi.org/10.9744/jmk.8.1.pp.40-50.
Kassim, Salina. 2016. “Islamic Finance and Economic Growth: The Malaysian Experience.” Global Finance Journal 30 (May): 66–76. https://doi.org/10.1016/j.gfj.2015.11.007.
Männasoo, Kadri, and David G Mayes. 2009. “Explaining Bank Distress in Eastern European Transition Economies.” Journal of Banking & Finance 33 (2): 244–53. https://doi.org/10.1016/j.jbankfin.2008.07.016.
Najaf, Rabia. 2017. “The Causal Relationship between Inflation and Economic Growth in Nigeria.” Journal of Accounting & Marketing 06 (01). https://doi.org/10.4172/2168-9601.1000208.
Pambuko, Zulfikar Bagus, and Diesyana Ajeng Pramesti. 2020. “The Effectiveness of Bank Aceh Syariah Conversion Decisions Diesyana Ajeng Pramesti.” Economica: Jurnal Ekonomi Islam 11 (1): 1–23. https://doi.org/10.21580/economica.2020.11.1.3494.
Rama, Ali. 2013. “Perbankan Syariah Dan Pertumbuhan Ekonomi Indonesia.” Signifikan: Jurnal Ilmu Ekonomi 2 (1). https://doi.org/10.15408/sjie.v2i1.2372.
Sarwer, M. Saleh, Muhammad Ramzan, and Waqar Ahmad. 2013. “Does Islamic Banking System Contributes to Economy Development.” Global Journal of Management and Business Research 13 (2).
Shakhaowat Hossin, Md. 2015. “The Relationship Between Inflation and Economic Growth of Bangladesh: An Empirical Analysis from 1961 to 2013.” International Journal of Economics, Finance and Management Sciences 3 (5): 426. https://doi.org/10.11648/j.ijefm.20150305.13.
Simatupang, H Bachtiar. 2019. “Peranan Perbankan Dalam Meningkatkan Perekonomian Indonesia.” Jurnal Riset Akuntansi Multiparadigma 6 (2): 136–46. https://doi.org/10.30743/akutansi.v6i2.2184.
Sinay, Lexy Janzen. 2014. “Pendekatan Vector Error Correction Model Untuk Analisis Hubungan Inflasi, Bi Rate Dan Kurs Dolar Amerika Serikat.” Barekeng: Jurnal Ilmu Matematika Dan Terapan 8 (2): 9–18. https://doi.org/10.30598/barekengvol8iss2pp9-18.
Tabash, M I, and Raj S Dhankar. 2013. “An Empirical Analysis of The Flow of Islamic Banking and Economic Growth in Bahrain.” International Journal of Management Sciences and Business Research 1 (1): 96–103.
Todaro, Michael P, and Stephen C Smith. 2011. Economic Development. 11th ed. United States: Addison Wesley.
Downloads
Published
Issue
Section
License
Authors who publish with this journal agree to the following terms:
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
Authors can enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), acknowledging its initial publication in this journal.
Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) before and during the submission process, as it can lead to productive exchanges and earlier and greater citation of published work (See The Effect of Open Access).
