Issue |
E3S Web of Conf.
Volume 479, 2024
International Seminar of Science and Applied Technology: Natural Resources Management for Environmental Sustainability (ISSAT 2023)
|
|
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Article Number | 07010 | |
Number of page(s) | 11 | |
Section | Sustainable Development | |
DOI | https://doi.org/10.1051/e3sconf/202447907010 | |
Published online | 18 January 2024 |
The role of Islamic banking financial intermediation on Indonesia’s economic growth
Accounting Department, Politeknik Negeri Bandung, West Java, Indonesia
* Corresponding author: tjetjepdjuwarsa584@gmail.com
This study attempts to examine the relationship between deposits, disbursed financing, the number of bank offices, and economic growth before and during the COVID-19 crisis. The time series data of Indonesian Islamic banking for the period from 2009 to 2022, has been utilized in this study, estimated using Auto Regressive Distributed Lag (ARDL). Deposits and disbursed financing respectively are the ratio of total deposits and total disbursed financing to nominal GDP. Economic growth is measured using Indonesia’s real GDP growth based on 2010 constant prices. The results show that in the long run, deposits have a very significant positive effect on economic growth. Meanwhile, financing and the number of bank offices do not affect economic growth. In the short term, except for the number of bank offices, real GDP, deposits, and financing contribute to the adjustment of changes in real GDP towards long-term balance, which takes approximately seven quarters. This study fills a gap in the literature on the role of Islamic banking on economic growth. This study also adds a new view of the role of Islamic banking in economic growth during the COVID-19 crisis. This study provides an important contribution to policymakers and other stakeholders.
© The Authors, published by EDP Sciences, 2024
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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