Public ownership and local bank lending at the time of the Covid-19 pandemic: Evidence from Indonesia

Akhmad Akbar Susamto, Danes Quirira Octavio, Tastaftiyan Risfandy and Dyah Titis Kusuma Wardani

Pacific-Basin Finance Journal, 2023, vol. 80, issue C

Abstract: This paper empirically analyzes whether the Covid-19 pandemic has brought about a significant impact on the lending of local banks and whether such impact has been different for public as compared to private local banks. Using panel data from 1344 Bank Perkreditan Rakyat (BPRs) –banks licensed to provide services within only a province's area– in Indonesia, this paper confirms the negative impact that the Covid-19 pandemic has had on local bank lending. This paper also confirms that the impact of the Covid-19 pandemic on lending has been smaller for local banks owned by majority government shareholders than for local banks owned by private shareholders, providing support to the “social” view of government intervention in the banking sector.

Keywords: Government ownership; Bank loans; Credit supply; Covid-19; BPRs (search for similar items in EconPapers)
JEL-codes: G01 G21 G28 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:80:y:2023:i:c:s0927538x23001385

DOI: 10.1016/j.pacfin.2023.102072

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