Intermediary performance of Islamic banks in the disruption era: does it contribute to economic growth?

Khasanah, Umrotul and Wicaksono, Ahmad Tibrizi Soni ORCID: https://orcid.org/0000-0001-8643-1351 (2021) Intermediary performance of Islamic banks in the disruption era: does it contribute to economic growth? Banks and Bank Systems, 16 (1). pp. 103-115. ISSN 1991-7074

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Abstract

The study aims to measure the intermediary performance of Islamic banks in relation to economic growth in Indonesia in the short and long term. There are four main variables used, namely financing, fund placement in BI (Central Bank of Indonesia), investment in securities, and third-party funds in all Islamic banks from 2007 to 2019. The data were tested using vector error correction models (VECM), Granger Causality, Impulse Response Function (IRF), and Variant Decomposition (VDC) to examine causality relationships, the short- and long-term effects, shocks, and variances in Islamic bank intermediary performance to economic growth. The results show that there is a two-way causality relationship between financing and third-party funds to economic growth. While in the short term, fund placement in BI, investment in securities, and financing have a significant influence on economic growth, but in the long run, only the placement of funds in BI will affect economic growth. Also, only fund placement in BI can shock and significantly contribute to economic growth in the long term. The overall intermediary performance of Islamic banks has not contributed to Indonesia’s economic growth in the long term.

Item Type:	Journal Article
Keywords:	financial forecasting; financial intermediaries; financial market policy
Subjects:	14 ECONOMICS > 1402 Applied Economics > 140207 Financial Economics 14 ECONOMICS > 1403 Econometrics > 140303 Economic Models and Forecasting 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150202 Financial Econometrics 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150299 Banking, Finance and Investment not elsewhere classified
Divisions:	Faculty of Economics > Department of Islamic Banking
Depositing User:	Ahmad Tibrizi Soni Wicaksono
Date Deposited:	29 Mar 2021 02:59

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