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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
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Non-linearity in the finance-growth nexus: Evidence from Indonesia, International Economics August 2017 (2016). Soedarmono, Wahyoe; Hasan, Iftekhar; Arsyad, Nuruzzaman

Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Soedarmono, Wahyoe; Hasan, Iftekhar; Arsyad, Nuruzzaman 
Number of authors
Status Published
Year of publication 2017 
Date 01.12.2016 
Name of article Non-linearity in the finance-growth nexus: Evidence from Indonesia 
Name of journal International Economics
Volume of issue 150 
Number of issue August 2017 
Pages 19-35 
Abstract This paper investigates the finance-growth nexus where bank credit is decomposed into investment, consumption, and working capital credit. From a panel dataset of provinces in Indonesia, it documents that higher financial development measured by financial deepening and financial intermediation exhibits an inverted U-shaped relationship with economic growth. This non-linear effect of financial deepening is driven by both investment credit and consumption credit. These results suggest that too much investment credit and, to a lesser extent, consumption credit are detrimental to economic growth. Ultimately, only financial intermediation associated with working capital credit has a positive and monotonic impact on economic growth.
Free text descriptor in Finnish Indonesia; rahoitusmarkkinat; rahoitus; pankit; luotot; talouskasvu 
Free text descriptor in English Financial deepening; Financial intermediation; Bank credit decomposition; Regional economic growth 
JEL-codes G20; O16; O40 
ISSN / e-ISSN 2110-7017 
auki Internet addresses
Additional information Available online 1 December 2016.