Non-Linear Impact of Domestic Credit on Economic Growth in Southeast Asia Countries

DOI

10.2991/aebmr.k.220702.074How to use a DOI?

Keywords

Generalized Method of Moment; Non-linear; Domestic Credit; Economic Growth

Abstract

This study aims to determine and analyze (1) the non-linear effect of domestic credit variables on economic growth in Southeast Asian countries. (2) the non-linear influence of domestic credit by banks on economic growth in Southeast Asian countries. This study uses savings, stock market capitalization, trade openness, inflation and human development index as control variables. The population in this study is a Southeast Asian country. This study uses a time series for the period 2009-2017. The analytical technique used is the Generalized Method of Moments (GMM) method using the Stata 14 software tool. The results showed that (1) economic growth (PEK) was positively influenced by domestic credit (KDK) and negatively related to the square of domestic credit (KDK2) at a significance level of 5%. and economic growth. The increase in domestic credit (KDK) will lead to increased economic growth (PEK) in Southeast Asian countries. However, the positive relationship between domestic credit (KDK) and economic growth (PEK) can only occur up to the optimal domestic credit threshold (KDK*). When the domestic credit value exceeds this optimal threshold, the correlation between domestic credit (KDK) and economic growth (PEK) becomes negative. The results show the optimal threshold (KDK*) is 87.1%. From these results it is known that if the domestic credit value is 87.1%, then economic growth in Southeast Asian countries will reach its maximum condition. (2) economic growth (PEK) is positively influenced by domestic credit by banks (KDB) and negatively related to the square of domestic credit by banks (KDB2), but statistically does not have a significant relationship. The results of this study have not been able to show a non-linear relationship between domestic credit by banks and economic growth in Southeast Asian countries.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Reny Aryestya
AU  - Joan Marta
PY  - 2022
DA  - 2022/07/21
TI  - Non-Linear Impact of Domestic Credit on Economic Growth in Southeast Asia Countries
BT  - Proceedings of the Eighth Padang International Conference On Economics Education, Economics, Business and Management, Accounting and Entrepreneurship (PICEEBA-8 2021)
PB  - Atlantis Press
SP  - 511
EP  - 520
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220702.074
DO  - 10.2991/aebmr.k.220702.074
ID  - Aryestya2022
ER  -