Sectoral Growth Impacts of Bank Credit Allocation: The Role of COVID-19 Pandemic as Moderating Variable

Ikhsan Ikhsan and Khairul Amri

Economic Studies journal, 2023, issue 5, 32-50

Abstract: Our study aims to investigate the effect of bank credit on sectoral output growth in Indonesia. The sectoral output comprises the agricultural, manufacturing, construction, wholesale & retail trades, and transport & storage sectors. We position the Covid-19 pandemic as a moderating variable between sectoral economic growth and bank credit. Using monthly time series data from 2015.M1 to 2020.M12, we employ hierarchical linear regression to estimate the functional relationship between variables. The study points out that bank credit positively affects sectoral output. In contrast, the covid-19 pandemic has had a negative effect. Nevertheless, the pandemic moderates the influence of bank credit on the manufacturing, construction, transport & storage sectors but not on the agriculture, wholesales & retail trades sectors.

JEL-codes: E51 G01 G21 O41 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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