Local Financial Development and Firm Performance: Does Financial Outreach Really Matters Within Indonesian Archipelago?  

Oleh:

Nugraha, Fickry Widya

Jenis: Article from Journal - ilmiah nasional - terakreditasi DIKTI
Dalam koleksi: Bulletin of Monetary Economics and Banking (ex: Buletin Ekonomi Moneter dan Perbankan) vol. 19 no. 3 (Jan. 2017), page 288-318.
Topik: Firm performance; local financial development; financial access
Fulltext: 667-1164-1-SM.pdf (1.71MB)

Isi artikel

This study attempt to examine whether firm’s performance depends on the local financial development across Indonesian provinces within 2010-2013. Combining data from the Indonesian survey of manufacturing firms with information from regional-level data, the study empirically documented several key findings. First, there are no consistent results that local bank availability is robustly associated with faster growth for firms in sectors with growth opportunities. Second, this paper documented a positive interplay between access to financial services to firm performance particularly within western part region of Indonesia. Third, access to the financial service appears to be closely connected with the level of economic development, particularly rate of poverty and inflation in the western part region of Indonesia. Taken these empirical finding together, this study imply that the level of inequality across Indonesian archipelago need to be reduced in order not only to provide a better access of financial services to the local stakeholders but also to improve small firms performance.

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