Abstract
This research discusses the impact of banking credit to economic growth in Indonesia, with panel data method using sectoral analysis 2002-2008. The objective of the research is to describe the influence of sectoral credit and employment growth to the economic growth in Indonesia. The result of this research is sectoral credit and employment growth has a positive impact to the economic growth. Based on fixed effect cross section specific coefficients model, banking credit in each sector has a positive impact to the economic growth, except credit in mining and quarrying sector. However, banking credit in mining and quarrying sector has a very little impact to the economic growth. All sectoral employment variables have positive impact to the economic growth except employment in electricity, gas and water supply sector and also agriculture employment. These two employment sector have a little impact to the economic growth. On the other hand, employment in mining and quarrying sector has a negative impact to the economic growth.
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