Capital flow and banking credit in Indonesia

Mirza Yuniar Isnaeni Mara, Nur M.Adhi Purwanto, Ina Nurmalia Kurniati, Nanda Rizki Fauziah and Euis Aqmaliyah

Economic Modelling, 2021, vol. 95, issue C, 298-310

Abstract: This study examines the effect of capital inflows on bank credit in Indonesia. Using aggregate and bank-level data (consist of all 115 commercial banks in Indonesia) from 2004Q1 to 2017Q4) and three approaches, namely structural vector autoregression (SVAR), logistic regressions, and panel regressions, it finds that capital inflows initially has a negative impact on bank credit (measured as credit per gross domestic product (GDP)), but the impact becomes positive after a year. Other investment has the largest impact on bank credit, when compared with other capital inflows, including trade credit and foreign loans. These inflows significantly influence growth in nominal bank credit.

Keywords: Banking credit; Capital flows; Panel data models; SVAR (search for similar items in EconPapers)
JEL-codes: C32 C33 E51 F32 G21 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999319316402
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:95:y:2021:i:c:p:298-310

DOI: 10.1016/j.econmod.2020.02.047

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().