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The Impact of Islamic Bank Financing, Government Spending, and Investment on Economic Growth in Indonesia

Nofrianto Nofrianto, Yunie Muliana, Adi Cahyadi

Abstract


This study aims to analyze the effect of Islamic bank financing, government spending, and investment on economic growth in Indonesia from 2003 to 2019. A quantitative descriptive methodusing the Vector Error Correction Model (VECM) analysis was applied. The results showed that in the short term, the variables of Islamic bank financing, government spending, and investment did not have a significant effect on economic growth. This shows that these variables require enough time to affect the economic growth. However in the long term, the results showed that Islamic bank financing and investment respectively have a significant, negative effect on economic growth, while government spending has a positive and significant effect on economic growth in Indonesia.

JEL Classification: F22, F24, I32, J01, O15

How to Cite:

Nofrianto, Muliana, Y., & Cahyadi, A. (2021). The Impact of Islamic Bank Financing, Government Spending, and Investment on Economic Growth in Indonesia. Signifikan: Jurnal Ilmu Ekonomi, 10(2), 299-310. https://doi.org/10.15408/sjie.v10i2.20469.


Keywords


Islamic banking; government spending; investment; VECM

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Full Text: PDF

DOI: 10.15408/sjie.v10i2.20469

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