Financial Growth Research Articles

Measuring Procyclicality Behavior on Islamic and Conventional Banks in Indonesia

Research Originality: This study contributes to capturing credit cycle movements during the COVID-19 pandemic and compares sizes of credit and business cycles to promote banking stability.Research Objectives: This study attempts to examine banking behavior on amplitude and frequency indicators by focusing on the credit property of Islamic and conventional banks from 2014 to 2020.Research Methods: Ordinary Least Square, frequency base filter and turning point analysis are used.Empirical Results: This study unveiled that the size of an Islamic bank’s amplitude was higher than conventional bank’s amplitude. Meanwhile, the size of the frequency of Islamic banks had a longer frequency than conventional banks, given Islamic banks rely on real sector-based financing which has a longer period of economic expansion.Implications: It is also argued that conventional banks have a riskier leverage indicated by a higher percentage of amplitude. Thus, it is recommended to Indonesian banking sectors to promote the growth of Islamic banks to achieve financial stability. This research is significance in showing the Islamic banking’s contribution on stability given Indonesia is taking serious effort becoming the epicentrum of Islamic finance growth in the world.JEL Classification: E51, G01, G21How to Cite:Wiranatakusuma, D. B., & Muttaqin, E. I. (2024). Measuring Procyclicality Behavior on Islamic and Conventional Banks in Indonesia. Etikonomi, 23(1), 249 – 270. https://doi.org/10.15408/etk.v23i1.35293.

ANALISIS TRANSMISSION OF MONETERY POLICY TERHADAP PERTUMBUHAN EKONOMI DAN KEUANGAN PASCA PEMULIHAN EKONOMI IN FIVE APEC COUNTRIES

The aim of this research is to determine and investigate how the global economic crisis in 2020 affected financial and economic growth after the Covid-19 crisis and the economic recovery that followed. Secondary data covering the period 2013 to 2023 was used in this research. Money supply, real interest rates, exchange rates, investment, inflation, and gross domestic product are the variables taken into account. This research examines the short-term and long-term impacts of monetary policy on financial and economic growth in five Asia Pacific Economic Cooperation (APEC) countries using the Structural Vector Autoregressive (SVAR) approach. Three variables investment, reallinteresttrates, and moneyxsupplyido not significantly influence1economicxor financial growth, according to the study's findings, while two variables inflation and exchange rates have a positive impact on economic and financial growth.

Sustainable Financing for Transport Infrastructure: An Integral Approach for the Russian Federation

The development of global transport infrastructure is a crucial aspect of economic growth and prosperity. In this study, the main trends in the development of global transport infrastructure are analyzed, with a focus on the state and trends in the functioning of the national transport infrastructure of the Russian Federation. By identifying key problems and determinants of financial growth, a preliminary decomposition is made to guide future development. Proceeding from the fact that the innovative development of Russia’s transport infrastructure should occur through state stimulation of the development of intellectual and partnership relationships and the formation of a digital environment for managing projects for its innovative transformation at the state level, this study identifies the goals, methods, and levels of ensuring the implementation of innovative transformations in transport infrastructure. Consideration of the historical aspects of the formation of the modern economy and comprehension of the mechanisms of state management and tools to ensure innovative transformations in the sphere of transport allowed us to identify three stages (dogmatic, strategic regulation, and innovative integration) of transformation regarding the theory of the state management for the innovative development of transport infrastructure in Russia. Taking into account the content of these periods of transformation allowed us to detail the specifics of the modern stage; highlight the shortcomings; and propose theoretical and methodological foundations for revising the provisions of the state regulation of innovative development in transport infrastructure. To determine the effectiveness of the processes of the state regulation of innovation activity in the transport industry, we propose a model for assessing the effectiveness of innovation activity in the transport complex, which is presented in the form of a three-level parametric system, where the first group of indicators allows us to assess the innovation activity of economic entities in the transport industry; the second allows us to assess innovation potential; and the third allows us to assess the effectiveness of innovation. The novelty of the proposed model is the consideration of the principles of dynamism, perspective, and expediency, and its application allows us to establish the level of innovative development in transport infrastructure. An important factor in ensuring the sustainable development of a country’s economy and forming its positive image in the world is its financial attractiveness. Therefore, the assessment of financial attractiveness is a priority task for the development of modern sustainable transport infrastructure in Russia.

Empowering Growth: The Role of Commercial Banks in Financing Small and Medium Enterprises (SMEs) in India

This research explores the pivotal role played by commercial banks in facilitating the financial growth and sustainability of Small and Medium Enterprises (SMEs) in India. SMEs form the backbone of the Indian economy, contributing significantly to employment generation and economic development. This study employs a mixed-methods approach, combining qualitative insights and quantitative analyses, to comprehensively examine the mechanisms through which commercial banks support and finance SMEs. The qualitative component of the study involves interviews, case studies, and expert opinions to capture nuanced perspectives on the challenges and opportunities faced by SMEs in accessing financial services from commercial banks. Simultaneously, quantitative data analysis will be employed to identify trends, correlations, and statistical patterns associated with the financing of SMEs. Various aspects of the role of commercial banks in SME financing will be investigated, including credit facilities, financial products tailored for SMEs, risk assessment, and the impact of banking support on the growth and sustainability of small businesses. The study aims to provide insights into the strategic implications of commercial bank interventions for the SME sector in India. The findings from this research are anticipated to offer valuable insights for policymakers, banking professionals, and SME entrepreneurs. By understanding the intricacies of SME financing by commercial banks, stakeholders can refine strategies, improve financial inclusion, and contribute to the robust development of small and medium enterprises, fostering economic growth in India. This study serves as a foundation for informed decision-making and future research within the realm of SME financing by commercial banks.

Religiosity-based behavioral study, Islamic finance users’ approach and selection standard: empirical evidence from Pakistan

Purpose Considering the speedy growth of Islamic finance and limited research work on Muslim behavior regarding Islamic Banking, this study aims to investigate to comprehend the stimulus of religiosity on customer’s behavior. Design/methodology/approach A conceptual model is developed on existing literature. The key dimensions of religiosity in the model include practice, knowledge, experience and consequences to capture the whole religiosity of customers. Model of the study investigates the impact of customer’s religiosity on their behavior in decision-making about selection of Islamic bank. Analysis of the study is based on the sample of 370 customers of Islamic banks from District Nowshera Khyber Pakhtunkhwa, Pakistan. The data for the study collected through random sampling by a comprehensive survey questionnaire. Binary logistic model is used to test the data for statistical analysis. Findings The key findings of the study suggest that religiosity influence customer behavior positively in decision-making regarding Islamic finance. Service standards of Islamic banking has also significant impact on customer perception, while the financial education of the customers has insignificant impact on customer behavior. Research limitations/implications This study mainly focused on the curiosity of the customer religious commitment, so religiosity is a vast phenomenon; there are deep sections in each dimension of religiosity, so further study is suggested for the comprehensive capture of each dimension of religiosity. Practical implications The results of the study have a great importance for the managers of Islamic finance industry to identify and detect the potential customers and divide the target market of banking industry on the base of religiosity. Furthermore, the study may bring significant managerial suggestions for marketing planners and can help them in market segmentation strategies. Originality/value The study examined the association between Muslim religiosity and Islamic banking customer’s selection behavior. This study spread the understanding of religiosity and its impact on Islamic banking customer’s behavior. Furthermore, the study is valuable to discover the level to which religiosity determines the inclinations of customers. This study helps marketing practitioners and researchers to grow their knowledge about customer’s motives in terms of religious commitment.

Legal aspects of regulation of cryptocurrencies and blockchain technologies in Ukraine

Introduction. Currently, there is an urgent need to regulate the functioning of cryptocurrency markets in the context of the evolution of social relations. The rejection of the bill aimed at regulating the cryptocurrency market does not have sufficient financial and legal justification, as evidenced by expert opinions and textual analysis, which revealed the narrow approach of the drafters of the bill to solving cryptocurrency issues. Moreover, since the current law of Ukraine "On Virtual Assets" defines cryptocurrencies as unsecured virtual assets, the issue of cryptocurrencies is practically removed from the agenda. At a time when the war with Russia has begun, and the general defense and financial security of Ukraine needs to be strengthened by the state and government, it seems unjustified to ignore not only threats to national security, but also potential sources of financial growth. The purpose of the paper is to clarify the legislative framework regarding cryptocurrencies and the legal status of cryptocurrency market participants in Ukraine. Results. The paper examines the peculiarities of the development of financial and legal regulation of the cryptocurrency market in connection with globalization processes. The main attention is paid to the problems that arise in connection with attempts to solve the issue of regulation of the crypto-currency market partially at the national legislative level, without actively promoting it at the international level. It is shown that international cooperation in the field of regulation of cryptocurrency markets should be based on the principles of international law. In the context of regulating the functioning of cryptocurrency markets in the context of globalization, a set of principles has been formed that can be worked on to harmonize national and international interests. Conclusion. Since the cryptocurrency market is an important component of the transnational global economy, an important condition for the effective response of law-making bodies to dynamic changes in social relations in the context of globalization is the timely formulation of the principles of development of the financial and legal regulation of the cryptocurrency market at various levels. It is argued that this should happen through the timely formulation and implementation of the principles of financial and legal regulation of the cryptocurrency market at various levels.

Dynamic linkages between carbon emission, energy utilization, financial growth and economic growth: evidence from SAARC

Dynamic linkages between carbon emission, energy utilization, financial growth and economic growth: evidence from SAARC

Mixed Analysis of the Strategic Management and Economic-Financial Growth of Micro and Small Enterprises in the Service Sector

Purpose: To analyze the influence of strategic management on the economic and financial growth of micro and small enterprises in the service sector in Chimbote, Peru. Theoretical framework: The theories associated with strategic management, economic-financial growth of micro and small enterprises in the service sector and other factors were addressed. Method: A mixed approach of the Dexplis type was applied, with a non-experimental and cross-sectional design, being the population the total of micro and small enterprises of the service sector in Chimbote and the non-probabilistic sample for the survey and the interview was 40 micro and small enterprises of the service sector that served to collect quantitative and qualitative data respectively. The quantitative data were obtained through the instrument adapted to measure strategic management (Gallardo, 2021), whose reliability was assessed by Cronbach's Alpha coefficient α = 0.905 and the economic-financial growth was evaluated through the instrument adapted for this case (Dutan & Ormaza, 2022), whose reliability was assessed by Cronbach's Alpha coefficient α = 0. 868 which was obtained when a pilot test of 20 participants was applied, where the quantitative data obtained were then processed in SPSS, and the qualitative data obtained from the questionnaire of open questions were evaluated with the Atlas.ti software considering 10 codes, 10 sub-categories and 5 categories, also taking into account other factors that influence economic-financial growth. Results and conclusions: The results support a high degree of positive correlation between strategic management and the economic-financial growth of micro and small enterprises in the service sector with an rs = 0.810 and a significance level of p = 0.000, where the coefficient of determination shows that strategic management has a 67.4% influence on economic-financial growth, while the remaining 32.6% is affected by other factors. In conclusion, there is a high positive correlation and there is a 67.4% influence of strategic management on the economic-financial growth of micro and small enterprises in the service sector, while the remaining 32.6% is due to other factors such as economic, public policy, legal, technological and ecological factors. Originality/value: To provide information on the perception of micro and small service sector companies in the handling of strategic management and its influence on economic-financial growth.

THE ROLE OF FINANCIAL TECHNOLOGY IN PROMOTING GROWTH IN ISLAMIC FINANCE IN THE DIGITAL ERA

Financial technology (fintech) has increased and can potentially drive Sharia finance's growth. This study aims to analyze fintech's role in promoting Islamic finance's growth in the digital era. The research method uses a literature study. A descriptive analysis approach involves breaking secondary data in journals, articles, and statistical reports related to the research topic. The results of this study indicate that the adoption of fintech in Sharia finance is predicted to continue to increase, driven by the millennial Muslim population. Fintech provides opportunities for Sharia financial product innovation. However, the challenges of developing Sharia fintech are significant and related to regulations, compliance risk, and human resources. Some examples of Sharia fintech platforms, such as P2P lending and equity crowdfunding, have been quite successful. The prospects for sharia fintech in Indonesia are positive with the support of digital infrastructure and the millennial Muslim population. Regulatory support is needed so that Sharia fintech is truly compliant and can drive the growth of Islamic finance. Sharia fintech has the potential to be a game changer for the development of Islamic finance in Indonesia. Comprehensive support from regulators and stakeholders can realize the optimal implementation of Sharia fintech for inclusive and sustainable Sharia finance expansion.

Economic Growth and Financial Intermediation Nexus in Pakistan: An ARDL Analysis

This paper explores the relationship between economic growth and financial intermediation in Pakistan. By utilizing data from 1996 to 2022, presence of cointegration in the long run is investigated by employing the auto regressive distributed lag (ARDL) bounds testing approach, whereas error correction model (ECM) is used to depict short run linkages. The augmented dickey fuller (ADF) test verifies the stationarity properties of the series. The results show that financial intermediation promotes economic growth both in short run as well as in long run and confirm the view of Schumpeter regarding finance growth nexus. The findings also reveal that investment and human development also significantly contribute to productivity and economic expansion whereas public expenditure exhibits a positive but insignificant effect due to crowding out effects. The study found that despite improvements in Pakistan's financial structure, sustainable economic growth requires an enabling investment climate and robust governance which can be achieved by implementing suitable reforms for development of a well-organized financial sector.

Meta heuristic approaches for sentiment analysis

AbstractOn the Internet, online microblogging and social networks have experienced tremendous growth. Millions of individuals share opinions on social networking platforms including Twitter, Facebook, YouTube, and Microblogging sites. Millions of individuals express their thoughts on social platforms namely Twitter, Facebook, YouTube, and microblogging sites. As user‐generated content is growing to a huge extent on the internet, the analysis, extraction identification and classification of opinion and sentiment polarity of different aspects has now become a challenging issue in sentiment analysis. In sentiment analysis, aspect level opinion mining, opinion spam review detection, extraction and representation of most relevant accessed data from the user‐generated data is a difficult process. The word vector representation using existing deep learning techniques affects the performance in aspect level opinion mining. Spammers propagate false opinion for payment exchange, which leads to degradation of the financial growth, business, and fame of the organization. To overcome the limitations aspect level opinion mining is used to recognize sentiment and polarity of aspects in the specified text. This work presents various input feature vectors of deep learning approaches aiming to improve performance in aspect level opinion mining. Next, three meta‐heuristic algorithms with k‐means clustering approach for classification of opinion spam reviews on social media transit tweets is presented. The proposed approaches are evaluated and compared with other existing approaches as well as other benchmark datasets namely Restaurant and Amazon reviews.

Energy, economy, financial development, and ecological footprint in Singapore

The escalating energy consumption resulting from rapid economic expansion is causing a decline in ecological health, therefore exacerbating the issue of climate change on a global scale. The juxtaposition of Singapore's ranking as having the most robust financial market with the largest ecological deficit globally implies the potential validity of the trade-off theory. The purpose of this study is to analyze the influence of Singapore's financial growth, energy use and economic development on the nation's ecological footprint. The investigation applied the Auto Regressive Distributed Lag (ARDL) method by using the annual time series data spanning from 1979 to 2021. The stationarity of data was confirmed by using several unit root tests. The ARDL bounds test revealed evidence for long term cointegration among the variables. The empirical results exposed that a 1% upsurge in financial growth, energy use, and economic expansion leads to a corresponding long-term increase in ecological footprint of 0.77%, 1.11% and 0.32%, as well as short-term increases of 0.44%, 0.61%, and 0.13%, respectively. Several diagnostic tests were used to confirm the accuracy of the ARDL outcomes. The findings of the analysis hold significant relevance for policymakers as they can inform the development of prudent policies that promote sustained economic prosperity without compromising environmental integrity.

Foreign Financial Inflows and Economic Growth in Nigeria: A Comprehensive Analysis

Several policy measures were targeted and adapted by governments globally to achieve and rapidly increase sustainable economic growth. In view of that, economies acclimatize to both monetary and fiscal policies in order to improve economic performance. A country's economic growth is an element of intuitive impacts of changing worldwide and homegrown powers. Attracting foreign financial inflows is one major policy strategy that the government has used, particularly in developing and emerging economies, to accelerate economic growth. This concentrate hence notices the Effect of Unfamiliar Economic Inflows, dominatingly, the degree to which Foreign Direct Investment, Foreign Portfolio Investment, Foreign Public Debts and Foreign Personal Remittances broadly control financial growth in Nigeria from 2000- 2021. The review utilized the Autoregressive Distributed Lag (ARDL) model to assess the information acquired. Discoveries uncovered that Foreign Direct Investment inflow altogether influences economic growth in Nigeria, and there is no huge long run connection between Foreign Portfolio Investment and financial growth in Nigeria. Besides, it was found that long run negative relationship exists among Settlement and Outer Public Obligation and economic growth in Nigeria. Last but not least, the study suggests that economic managers devise measures that will make it easier to mobilize more domestic investment to lessen the uncertainty that may accompany foreign investment during periods of local or international economic crises. In a similar vein, when making decisions that have an impact on the expansion of the economy, policymakers must take into account the potential benefits as well as the potential dangers associated with remittances.

Industrial technology progress, digital finance development and corporate risk-taking: Evidence from China's listed firms.

Industrial technological progress, as an essential industrial-technological and institutional phenomenon, brings with it the possibility of high profits for firms but also implies new norms and rules of competition, which affect the willingness and propensity of firms to bear the costs of undertaking venture capital projects. This study empirically investigates the causal impact of industrial-technological progress on corporate risk-taking and the mechanism of digital financial growth on the relationship between the two, based on data from China's A-share listed businesses from 2011 to 2020. This paper finds that (1) industrial technological progress improves enterprise risk-taking levels. Moreover, digital financial development has an incentive effect on industrial technological progress and enterprise risk-taking levels. (2) Industrial technological progress under digital financial development generates financing constraint relaxation effects, input capital return enhancement effects, and innovation performance incentive effects, increasing enterprise risk-taking. (3) The positive moderating effect of digital financial development on the relationship between industrial technological progress and the risk-taking level of enterprises in the eastern regions and enterprises in the high-tech industry is more prominent. The study's findings provide a theoretical foundation and policy insights on the crucial elements of industrial-technological progress and enterprises' increased ability to take risks throughout the development of digital finance.

Unveiling the Symphony of Economic Policies on Corporate Financial Performance: A Quantitative Revelation through SMARTPLS Analysis

This research investigates the influence of economic stimulus policy, fiscal policy, and the solvency risk of companies on their financial performance. Utilizing a quantitative approach, the study adopts regression analysis through SMARTPLS to analyze the data. Primary data for the variables - impact of economic stimulus policy, solvency risk of companies, and fiscal policy - were gathered, along with secondary data over a five-year period pertaining to the financial performance variable. The dataset was derived from 26 manufacturing companies listed on the Indonesia Stock Exchange (BEI). The findings reveal that both economic stimulus policy and fiscal policy exert a positive and significant effect on financial performance. In contrast, the solvency risk of companies does not exhibit a significant impact. This outcome suggests that while macroeconomic policies facilitate an environment conducive to financial growth, the internal risk management and financial structuring of a company play a critical role in leveraging these external benefits. The study underscores the importance of strategic internal management and effective risk mitigation practices in enhancing and sustaining financial performance amidst varying economic policies.

Digital Financial Inclusion and Enterprise Technological Innovation

Digital Financial Inclusion and Enterprise Technological Innovation

FINANCIAL STRUCTURE AND ECONOMIC GROWTH NEXUS IN EMERGING ECONOMICS IN AFRICA

The study investigates specifically the relationship between Gross Domestic Product (GDP), total stock market traded, market capitalization, private credit by deposit bank, human capital, foreign direct investment, population and trade openness (imports plus exports) and economic growth (GDP per capita). We use the extended endogenous growth model with specifications by employing dynamic panel data methodology. Our empirical application of the dynamic panel model to the finance–growth nexus is based on an unbalanced panel dataset of 29 middle-income African countries1 over the period 1990 – 2019 obtained from World Development Indicators. The findings revelead that financial development exerts significant and positive impacts on economic growth. The overall development of the financial system is essential for enhancing economic outcomes. Therefore, attempts at achieving some fine balance between a bank-based system and a market-based system are trivial to growth.

글로벌 손해보험산업의 성장성과 수익성 및 안정성에 관한 연구

The objective of this paper is to provide a theorectical and empirical frame work to asses the tradeoffs among three fundamental objectives: profitability, growth, and safety in global general insurance indusry (USA, Japan and Korea). Our financial performance analysis relies on panel data of global general insurance industry for the years from 2010 to 2019 by using key financial variables. A quantitative evaluation of three countries genneral insurers' financial growth, profitability and saferty areas is carried out. The financial evaluation is done in the growth, profitability and safety factors including premium and capital increse ratio, underwriting and investment income, leverage and solvency ratio. The results show that there are no key differences among three impact areas: impact of general insurance growth on profitability, profitability on saferty, safety on growth in three countries. Also, the results suggest that the impact of safety on profitability and growth is a positive and significant relationship and emphasize the need to jointly consider growth, profitability, and safety when evaluating general insurers financial performance. Therefore, global general insurance indusry has to strive to strengthen financial soundness through growth and profitability because underwriting profit and growth depend on the level of safety.

The Role of New Era Exporters on the Financial Growth in India

The present study aims to investigate the relationships among India's financial development, international trade, and the evolution of economic growth. The study's primary focal areas have been the real GDP, which has replaced economic growth, export and import services, international commerce, gross capital creation, and exchange rate as independent variables. More frequent traders are often found to have excellent advancement rates and to have a positive influence on the growth of the financial industry and the economy. The research will also examine if there is a sustained correlation between various macroeconomic factors in India from 2000 to 2018, such as trade growth, financial development, and other macroeconomic variables. Regarding the previous sentence, the study employed the Johansen co-integration approach, KPSS, ADF, and PP to ascertain if financial development, economic growth, and trade variables continue to be associated over an extended period of time. These techniques were also applied to investigate the long-term relationships between particular variables. The direction of causation between variables can be ascertained using the Granger causality test. All of the variables have been shown to be non-stationar, and the study demonstrates that there is a long-term correlation between financial development, economic growth, and international trade. The study's conclusions show the interdependence of trade, financial development, and economic development; yet, while macroeconomic policy is stable, negative macroeconomic variables, such increasing inflation, might impede economic progress.

Cultures of Inequality: Labor, Social Finance, and the Swinging Pendulum of Trust in Capitalism

Social finance, an arena of international finance comprising social banking, impact investing, and microfinance, offers a powerful conceptual lens through which to interrogate the interface of finance and labor in financial capitalism. This article investigates social finance’s development at the crossroad of two processes. Social finance emerged in the context of a process of laboring finance, an often-coercive inclusion of workers and households into financial circuits of accumulation and expansion made possible by labor market changes that began in the 1970s. The global financial crisis occasioned the growth of social finance, which, by means of financing labor, placed the reproductive needs of labor—the needs of society’s most disadvantaged agents, the poor, the homeless, the marginal, and unemployed workers—at the center of financial accumulation. By informing an oscillatory movement between laboring finance and financing labor, and, affectively, between trust and distrust, social finance primes and cultivates financial market participants’ belief in purported solutions to the social problems financial capitalism has contributed to create. As a critical investigation of the complex interface between finance and labor that animates social finance’s operations, this article aims to provide conceptual resources that can contribute to releasing labor’s social cooperation from finance’s hegemony.