MSMEs as mediation in the effects of investment credit, interest rates, and labor on economic growth: Evidence from Indonesia

Muliadi Muliadi, Dio Caisar Darma and Jati Kasuma
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Muliadi Muliadi: Department of Economics, Faculty of Economics and Business, Mulawarman University, Samarinda City, Indonesia
Dio Caisar Darma: Department of Management, Sekolah Tinggi Ilmu Ekonomi Samarinda, Samarinda City, Indonesia
Jati Kasuma: Faculty of Business and Management, University Teknologi MARA (Sarawak),SamarahanCity,Malaysia

International Journal of Finance & Banking Studies, 2020, vol. 9, issue 2, 01-12

Abstract: An increase in MSMEs in large numbers is very instrumental in increasing economic growth in developing countries, including Indonesia. The research objective is based on identifying the effect of investment credit, interest rates, and labor on economic growth through the role of MSMEs.The design of this research is descriptive-verification to present a structured, factual and accurate picture and test hypotheses empirically through the MRA model.Empirical analysis proves that investment creditand interest rates through the role of MSMEs can influence positively and significantly on Indonesia's economic growth. In other results, it appears that the role of MSMEs is less able to mediate the effect of labor on Indonesia's economic growth. This fact is based on a negative and insignificant relationship.In a sentence or two, enter the implications and limitations of your research. In Indonesia, increasing bank lending to MSMEs in practice is undermined by lending policies by banks and by macroeconomic factors (economic growth, interest rates, investment credit, and labor).From this study, the fulfillment of investment credit, interest rates, and labor needed in the Indonesian economy through MSMEs come from the availability of funds to finance investments that can be collected from various sources of lending and business capital from banks and non-bank institutions.

Keywords: MSMEs; Investment Credit; Interest Rates; Labor; Economic Growth (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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