The Influence of Islamic Banks and Sovereign Retail Sukuk on Economic Growth in Indonesia
Keywords:
Indonesia, Retail Sukuk, Sharia Banking
Abstract
This study aims to examine the short-term and long-term effects of Islamic banking financing and the development of sovereign Retail Sukuk (SR) on Indonesia's economic growth during the period 2009: Q1 to 2019: Q3. Outstanding SR is used as an indicator of SR’s development in seeing its impact on Indonesia's economic growth. Through Dickey Fuller-Generalized Least Square (DF-GLS) analysis, Lag-Length Test, Auto-Regressive Distributed Lag (ARDL), Cointegration Bound Testing. Total Sharia Bank financing and outstanding SR do not have long-term cointegration with Indonesia's economic growth. Meanwhile, in the short term, Indonesia's GDP is influenced positively by total Islamic Bank financing (TFIN) at lag 3 and negatively by the outstanding SR at lag 3 and 4. Researchers only examined the Islamic banking sector, specifically highlighting financing in Islamic banking and SR’s development through nominal outstanding on a quarterly scale. The limitations of the variables studied are becoming the limitations of this study. The government as a policymaker have to provide a support through cooperation between institutions and Medium and Small Enterprises (MSMEs) with Islamic banks in collecting and channeling financing, education, and outreach to the public. Consequently, the deepest layers need to be improved to make SR an individual investment instrument that can support Indonesia's economic growth. The implications of this study to offer valuable insights for policymakers, urging them to foster the growth of Islamic banks and promote retail Sukuk as an investment option and enhancing investors awareness of retail Sukuk.
References
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Kamarudin, A. A., & Kassim, S. (2022). Islamic Banking Sector Development and Economic Growth: Empirical Evidence from Malaysia. International Journal of Economics, Management and Accounting, 30(2), 451–480. https://doi.org/10.31436/ijema.v30i2.974
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Kurniawan, P. H., Dompak, T., & Tampubolon, R. P. (2019). Kedigdayaan Produk Domestik Bruto: Aspek Sejarah dan Popularitas di Masa Depan. Dialektika Publik, 3(2), 38–45.
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Trung, N. K. Q. (2021). Determinants of Bank Performance in Vietnamese Commercial Banks: An Application of The Camels Model. Cogent Business & Management, 8(1), 1–35. https://doi.org/10.1080/23311975.2021.1979443
Wesiah, S., & Onyekwere, S. C. (2021). The Relationship Between Financial Development and Economic Growth in The United Kingdom: A Granger Causality Approach. Quantitative Economics and Management Studies, 2(1), 47–71. https://doi.org/10.35877/454RI.qems258
Yıldırım, S., Yıldırım, D. C., & Diboglu, P. (2020). Does Sukuk Market Development Promote Economic Growth? PSU Research Review, 4(3), 209–218. https://doi.org/10.1108/prr-03-2020-0011
Adamsah, B., & Subakti, G. E. (2022). Perkembangan Industri Halal Terhadap Pertumbuhan Ekonomi Manusia. Indonesian Journal of Halal, 5(1), 71–75. https://doi.org/10.14710/halal.v5i1.14416
Afandi, M. A., & Amin, M. (2019). Islamic Bank Financing and Its Effects on Economic Growth: A Cross Province Analysis. Signifikan: Jurnal Ilmu Ekonomi, 8(2), 243–250. https://doi.org/10.15408/sjie.v8i2.10977
Al Fathan, R., & Arundina, T. (2019). Finance-Growth Nexus: Islamic Finance Development in Indonesia. International Journal of Islamic and Middle Eastern Finance and Management, 12(5), 698–711. https://doi.org/10.1108/IMEFM-09-2018-0285
Alafif, W. M. S., & Shaheen, R. (2021). An Empirical Evaluation of The Impact of Islamic Financing on Economic Growth in Saudi Arabia. Palarch’s Journal of Archaeology of Egypt/Egyptology, 18(13), 499–509.
Alimuddin, Putri, N. A., & Nurleni. (2020). Analysis of Government Development Financing between Sukuk and Bonds. IOP Conference Series. Earth and Environmental Science, 1–18. https://doi.org/10.1088/1755-1315/473/1/012073
Andiansyah, F., Hanaf, S. M., Haryono, S., & Wau, T. (2022). The Influence of Islamic Financial Instruments On Indonesia’s Economic Growth: An Autoregressive Distributed Lag Approach. Al-Amwal : Jurnal Ekonomi Dan Perbankan Syari’ah, 14, 246–262. https://doi.org/10.24235/amwal.v%vi%i.11826
Andiansyah, F., Hanafi, S. M., Haryono, S., & Wau, T. (2022). Pengaruh Instrumen Keuangan Syariah Terhadap Pertumbuhan Ekonomi Indonesia. Al-Masraf (Jurnal Lembaga Keuangan Dan Perbankan), 7(1), 69–86.
Andriza, D. R., Kaban, R. F., & Widjaja, H. S. (2021). The Effect of Corporate Sukuk and Sharia Mutual Funds on Economic Growth In Indonesia. Gorontalo Development Review, 4(2), 111–123. https://doi.org/10.32662/golder.v0i0.1740
Anggraini, M. (2019). Islamic Banking Development and Economic Growth: a Case of Indonesia. Asian Journal of Islamic Management (AJIM), 01(01), 51–65.
Anwar, M. S., Junaidi, Salju, Wicaksono, R., & Mispiyanti. (2020). Islamic Bank Contribution to Indonesian Economic Growth. International Journal of Islamic and Middle Eastern Finance and Management, 13(3), 519–532. https://doi.org/10.1108/IMEFM-02-2018-0071
Aristawidya, N., & Fitria, A. (2022). Pengaruh Dana Investasi Melalui Instrumen SUN dan SBSN Terhadap Pertumbuhan Ekonomi Indonesia. Jurnal Ilmu Dan RIset Akuntansi, 11(8), 1–15.
Badan Pusat Statistik. (2020). Produk Domestik Bruto (Lapangan Usaha). Bps.Go.Id.
Buchholz, K. (2020). China Could Overtake The US as The World’s Largest Economy by 2024. World Economic Forum. https://www.weforum.org/agenda/2020/07/largest-global-economies-1992-2008-2024/
Cupian, Arie, F., & Hasanah, A. (2020). Perkembangan Sektor Keuangan Islam dan Pertumbuhan Ekonomi: Studi Empiris Negara OKI. Al-Tijary:Jurnal Ekonomi Dan Bisnis Islam, 6(1), 1–15. https://doi.org/10.21093/at.v6i1.2371
DinarStandard. (2020). State of the Global Islamic Economy Report: Thriving in Uncertainty. DinarStandard.
Elmawazini, K., Khiyar, K. A., & Aydilek, A. (2020). Types of Banking Institutions and Economic Growth. International Journal of Islamic and Middle Eastern Finance and Management, 13(4), 553–578. https://doi.org/10.1108/IMEFM-09-2018-0304
Gani, I. M., & Bahari, Z. (2021). Islamic Banking’s Contribution to The Malaysian Real Economy. ISRA: International Journal of Islamic Finance, 13(1), 6–25. https://doi.org/10.1108/IJIF-01-2019-0004
Ganti, A. (2020). Nominal Value: What It Means, Formulas for Calculating It. Investopedia. https://www.investopedia.com/terms/n/nominalvalue.asp
Hafsa, Y., & Oumaima, B. (2021). An Overview Of Sukuk Issuance and Their Contribution in Economic Empowerment. AZKA International Journal of Zakat & Social Finance (AZJAF), 2(1), 33–48. https://doi.org/10.51377/azjaf.vol2no1.42
Hamadi, H., & Awdeh, A. (2020). Banking Concentration and Financial Development in The MENA Region. International Journal of Islamic and Middle Eastern Finance and Management, 13(4), 675–689. https://doi.org/10.1108/IMEFM-03-2019-0097
Hamadou, I. (2022). Islamic Banking System and Economic Growth: Exploration of D-8 Countries. Muslim Business and Economic Review, 1(1), 131–151. https://doi.org/10.56529/mber.v1i1.32
Ilmia, A. (2020). Sukuk Negara dan Pembangunan Infrastruktur di Indonesia. Finansha: Journal of Sharia Financial Management, 1(2), 22–34. https://doi.org/10.15575/fsfm.v1i2.10761
Jalil, A. (2019). Obligasi Dan Sukuk dalam Perspektif Keuangan Islam. At-Tawazun, 7(2), 130–149.
Kamarudin, A. A., & Kassim, S. (2022). Islamic Banking Sector Development and Economic Growth: Empirical Evidence from Malaysia. International Journal of Economics, Management and Accounting, 30(2), 451–480. https://doi.org/10.31436/ijema.v30i2.974
Kartini, E., & Milawati. (2020). How Sukuk and Conventional Bond Affect Economic Growth? Evidence from Indonesia. International Journal of Economics and Financial Issue, 10(5), 77–83.
KNEKS. (2018). Masterplan Ekonomi Syariah Indonesia 2019-2024. Komite Nasional Ekonomi dan Keuangan Syariah (KNEKS).
Kurniawan, P. H., Dompak, T., & Tampubolon, R. P. (2019). Kedigdayaan Produk Domestik Bruto: Aspek Sejarah dan Popularitas di Masa Depan. Dialektika Publik, 3(2), 38–45.
Ledhem, Mohammed Ayoub Mekidiche, M. (2020). Economic Growth and Financial Performance of Islamic Banks: A CAMELS Approach. Islamic Economic Studies, 28(1), 47–62. https://doi.org/10.1108/IES-05-2020-0016
Mohamad, M. T., & Saeed, M. (2019). Does Inter-Bank Investments Restraints Financing Performance of Islamic Banks? In Advanced Methodologies and Technologies in Business Operations and Management (pp. 46–60). IGI Global. https://doi.org/10.4018/978-1-5225-7362-3.ch003
Muharam, H., Anwar, R. J., & Robiyanto. (2019). Islamic Stock Market and Sukuk Market Development, Economic Growth, and Trade Openess (The Case Of Indonesia dan Malaysia). Verslas: Teorija Ir Praktika / Business: Theory and Practice, 20, 196–207. https://doi.org/10.3846/btp.2019.19
Narayan, P. K. (2004). Reformulating Critical Values For The Bounds F-Statistics Approach to Cointegration: An Application to The Tourism Demand Model For Fiji. Journal Contribution. https://doi.org/10.4225/03/5938abda7b4ab
Normasyhuri, K., Budimansyah, & Triyadi, E. (2022). No Dampak Penerbitan Surat Utang Negara (SUN) dan Surat Berharga Syariah Negara (SBSN) Pada Pertumbuhan Ekonomi Indonesia Era Pandemi Covid-19: Tinjauan Ekonomi Islam. JIEI: Jurnal Ilmiah Ekonomi Islam, 8(1), 688–698.
Pradhan, R. P., Arvin, M. B., Norman, N. R., & Bahmani, S. (2020). The Dynamics of Bond Market Development, Stock Market Development and Economic Growth. Evidence From The G-20 Countries. Journal of Economics, Finance and Administrative Science, 25(49), 119–147. https://doi.org/10.1108/jefas-09-2018-0087
Putri, R. D. (2020). Merger Tiga Bank BUMN Syariah Ditargetkan Rampung Februari 2021. Tirto.Id. https://tirto.id/merger-tiga-bank-bumn-syariah-ditargetkan-rampung-februari-2021-f5Ud
Rizvib, S. A. R., Narayan, P. K., Sakti, A., & Syarifuddin, F. (2020). Role of Islamic Banks in Indonesian Banking Industry: an Empirical Exploration. Pacific-Basin Finance Journal, 62, 1–10.
Saeed, M. Y., Hamid, K., Rehman, M. A. U., & Nazam, M. (2020). Islamic Financial Development and Economic Growth of Emerging Economy of Pakistan; a Panel Data Approach. Journal of Business and Social Review in Emerging Economies, 6(1), 197–208. https://doi.org/10.26710/jbsee.v6i1.1039
Santoso, F., & Artha, B. (2021). Pengaruh Ekspor Terhadap Gross Domestic Product (Studi Kasus Pada Negara-Negara Islam). JEMES: Jurnal Ekonomi Manajaemen Dan Sosial, 4(2), 10–22.
Setiawan, I. (2021). Pembiayaan UMKM, Kinerja Bank Syariah dan Pertumbuhan Ekonomi di Indonesia. Islamic Banking: Jurnal Pemikiran Dan Pengembangan Perbankan Syariah, 6(2), 263–278. https://doi.org/10.36908/isbank
Sukmana, R. (2020). A Critical Assessment of Retail Sovereign Sukuk in Indonesia. Qualitative Research in Financial Markets, 12(2), 243–262. https://doi.org/10.1108/QRFM-10-2018-0109
Supriani, I., Fira, B. A., Fauziah, N. N., & Maulayati, R. R. (2021). Revisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience. Shirkah: Journal of Economics and Business, 6(1), 18–37. https://doi.org/10.22515/shirkah.v6i1.383
Tabash, M. I., Abdulkarim, F. M., Akinlaso, M. I., & Dhankar, R. S. (2022). Islamic Banking and Economic Growth: Fresh Insights from Nigeria using Autoregressive Distributed lags (ARDL) Approach. African Journal of Economic and Management Studies, 13(4), 582–597. https://doi.org/10.1108/AJEMS-03-2021-0138
Trung, N. K. Q. (2021). Determinants of Bank Performance in Vietnamese Commercial Banks: An Application of The Camels Model. Cogent Business & Management, 8(1), 1–35. https://doi.org/10.1080/23311975.2021.1979443
Wesiah, S., & Onyekwere, S. C. (2021). The Relationship Between Financial Development and Economic Growth in The United Kingdom: A Granger Causality Approach. Quantitative Economics and Management Studies, 2(1), 47–71. https://doi.org/10.35877/454RI.qems258
Yıldırım, S., Yıldırım, D. C., & Diboglu, P. (2020). Does Sukuk Market Development Promote Economic Growth? PSU Research Review, 4(3), 209–218. https://doi.org/10.1108/prr-03-2020-0011
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2023-06-14
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