The Impact of Financial Inclusion on Economic Growth in Indonesia: Panel Data 34 Province

Authors

  • Purwiyanta Purwiyanta Universitas Pembangunan Nasional Veteran Yogyakarta
  • C Ambar Pujiharjanto Universitas Pembangunan Nasional Veteran Yogyakarta
  • Rini Dwi Astuti Universitas Pembangunan Nasional Veteran Yogyakarta

DOI:

https://doi.org/10.31098/ebs.v1i1.73

Keywords:

financial inclusion, economic growth, panel data

Abstract

Financial inclusion is a significant phenomenon that needs the attention of policymakers around the world in planning strong policies to achieve sustainable growth. Most studies focus on access to finance or financial depth or a combination thereof. This study develops previous studies by looking at three aspects of financial inclusion: access, depth, and stability. This study aims to analyze the effect of financial depth, financial access, and financial stability on economic growth in 34 provinces in Indonesia for the 2014-2018 period. Based on the Fixed Effect Model of panel data, the results indicated that all financial inclusion variables used in this research affected economic growth. Financial depth and stability have a positive effect, while access to finance has a negative effect. This shows the validity of the paradox of thrift in Indonesia.

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Published

2020-10-25

Issue

Vol. 1 No. 1 (1): October 2020

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