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Effects of Financial Inclusion and Openness on Banking Stability: Evidence from Developing and Developed Countries M. Abdi Shalihin; Sugiharso Safuan
Economics and Finance in Indonesia Volume 67, Number 2, December 2021
Publisher : Institute for Economic and Social Research

This study seeks to contribute to the emerging debate regarding the effects of financial inclusion and openness on banking stability. Panel data from 217 developing and developed countries from 2004 to 2017 showed that financial inclusion did not affect banking stability. However, financial openness significantly affected banking stability in all countries worldwide. Furthermore, the interaction of financial inclusion and openness had a significant positive effect on banking stability in developing and all countries worldwide. This finding indicates that the more funds obtained by banks from the implementation of financial inclusion policy and financial openness policy, the greater the potential for banks to maintain their stability. Therefore, to maintain bank stability, each country needs to synchronize its policies on financial inclusion and financial openness. This finding also contributes to the literature on understanding the essential financial inclusion policies and financial openness to improve bank stability.

On Nonlinear Relationship between Inflation and Economic Growth: A Study of ASEAN-5 Countries Period 2000–2016 Ambar Galih; Sugiharso Safuan
Economics and Finance in Indonesia Volume 63, Number 1, June 2017
Publisher : Institute for Economic and Social Research

Money (inflation) has played a vital role in economic growth. However, the nexus between them has always drawn mesmerizing debates. From the thoughts of Classical and Keynes which argued the existence of money neutrality, to the level of empirical studies which find either positive or negative correlation between inflation and economic growth. Recent studies concerning the debatable relationship have evolved it into a hypothesis whether the relation is nonlinear with a threshold or a point where the link switches. This study aims to re-examine the causality between inflation and economic growth in ASEAN-5 countries period 2000Q1–2016Q4. The results based on Threshold Vector Autoregression model indicate the presence of a nonlinear relationship between the two variables.

The Effectiveness of Unconventional Monetary Policy (UMP) on Financial Markets in Indonesia and Malaysia during the Covid-19 Pandemic Ardina Yulia Putri; Sugiharso Safuan
SRIWIJAYA INTERNATIONAL JOURNAL OF DYNAMIC ECONOMICS AND BUSINESS SIJDEB, Vol. 6, No. 4, December 2022
Publisher : Faculty of Economics, Universitas Sriwijaya

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.29259/sijdeb.v6i4.413-438

Abstract: This paper discusses the effectiveness of unconventional monetary policy (UMP) on financial markets, includes the exchange rate and stock return index in Indonesia and Malaysia during the Covid-19 pandemic. Using announcements issued by the central banks of Indonesia and Malaysia as a benchmark for changes of yield curve in response to UMP, the effectiveness of UMP on exchange rates and stock return index is estimated using the sign and zero restriction VAR. As a result, UMP is effective on exchange rates in Indonesia and Malaysia, but it is not effective on stock return index in those two countries.

Perilaku Tabungan ASEAN 5, Jepang, Cina, Korea, dan Implikasinya terhadap Ketidakseimbangan Global Safuan, Sugiharso; Sari, Heidy Ruswita
Jurnal Ekonomi dan Pembangunan Indonesia Vol. 13, No. 1
Publisher : UI Scholars Hub

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The study examines saving behavior in ASEAN 5+3 namely Indonesia, Malaysia, Singapore, Thailand, Philippines, Japan, China, and Korea during 1991-2007 and its implication toward global imbalances. By using fixed effect panel data regression, this research shows that government spending, interest rate and inflation, financial development through private domestic credit and stock market capitalization along with the 1997 Asian crisis significantly affect the saving behavior. As a result, a macroeconomic stability through interest rate and inflation, the reinforcement of financial development and crisis anticipation policy are required to support global re-balancing through global saving redistribution.

Analisis Keseimbangan Eksternal Indonesia: Pendekatan Intertemporal Model of Current Account Nurmalindah, Nurmalindah; Safuan, Sugiharso
Jurnal Ekonomi dan Pembangunan Indonesia Vol. 13, No. 2
Publisher : UI Scholars Hub

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Current account balance has an important role of measuring the direction and the amount of international loan. This study analyzes Indonesian external balance due to its solvency condition of external debt and sustainability of current account balance during 1970-2007 by intertemporal-model approach of current account. The results of cointegration test and bivariate autoregressive (VAR) indicate that solvency condition holds, but not for the sustainability condition of current account balance. It means that Indonesia has capability to payback its external debt.

Pengaruh Penggabungan Mata Uang di Uni Eropa terhadap International Risk Sharing dan Home Bias Triandhari, Risna; Safuan, Sugiharso
Jurnal Ekonomi dan Pembangunan Indonesia Vol. 12, No. 2
Publisher : UI Scholars Hub

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Resident of the industrialized countries can lower some of their economic risk they face by diversifying their portfolios including foreign assets. In the world with perfect capital mobility, international risk sharing will reduce saving with constant relative risk aversion. The objective of this study to analyze the impact of the establishment of single currency on the degree of international risk sharing and the home bias among country member of European Union (EU). Using panel data, the increasing output correlation between individual countries and group of eleventh countries indicate the adoption of single currency increase the degree of international risk sharing.

Effects of Financial Inclusion and Openness on Banking Stability: Evidence from Developing and Developed Countries Safuan, Sugiharso; Shalihin, M. Abdi
Economics and Finance in Indonesia Vol. 67, No. 2
Publisher : UI Scholars Hub

Show Abstract | Download Original | Original Source | Check in Google Scholar

This study seeks to contribute to the emerging debate regarding the effects of financial inclusion and openness on banking stability. Panel data from 217 developing and developed countries from 2004 to 2017 showed that financial inclusion did not affect banking stability. However, financial openness significantly affected banking stability in all countries worldwide. Furthermore, the interaction of financial inclusion and openness had a significant positive effect on banking stability in developing and all countries worldwide. This finding indicates that the more funds obtained by banks from the implementation of financial inclusion policy and financial openness policy, the greater the potential for banks to maintain their stability. Therefore, to maintain bank stability, each country needs to synchronize its policies on financial inclusion and financial openness. This finding also contributes to the literature on understanding the essential financial inclusion policies and financial openness to improve bank stability.

On Nonlinear Relationship between Inflation and Economic Growth: A Study of ASEAN-5 Countries Period 2000â€“2016 Galih, Ambar; Safuan, Sugiharso
Economics and Finance in Indonesia Vol. 63, No. 1
Publisher : UI Scholars Hub

Show Abstract | Download Original | Original Source | Check in Google Scholar

Money (inflation) has played a vital role in economic growth. However, the nexus between them has always drawn mesmerizing debates. From the thoughts of Classical and Keynes which argued the existence of money neutrality, to the level of empirical studies which find either positive or negative correlation between inflation and economic growth. Recent studies concerning the debatable relationship have evolved it into a hypothesis whether the relation is nonlinear with a threshold or a point where the link switches. This study aims to re-examine the causality between inflation and economic growth in ASEAN-5 countries period 2000Q1-2016Q4. The results based on Threshold Vector Autoregression model indicate the presence of a nonlinear relationship between the two variables.

The Effectiveness of Unconventional Monetary Policy (UMP) on Financial Markets in Indonesia and Malaysia during the Covid-19 Pandemic Ardina Yulia Putri; Sugiharso Safuan
SRIWIJAYA INTERNATIONAL JOURNAL OF DYNAMIC ECONOMICS AND BUSINESS SIJDEB, Vol. 6, No. 4, December 2022
Publisher : Faculty of Economics, Universitas Sriwijaya

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.29259/sijdeb.v6i4.413-438

Abstract: This paper discusses the effectiveness of unconventional monetary policy (UMP) on financial markets, includes the exchange rate and stock return index in Indonesia and Malaysia during the Covid-19 pandemic. Using announcements issued by the central banks of Indonesia and Malaysia as a benchmark for changes of yield curve in response to UMP, the effectiveness of UMP on exchange rates and stock return index is estimated using the sign and zero restriction VAR. As a result, UMP is effective on exchange rates in Indonesia and Malaysia, but it is not effective on stock return index in those two countries.

Pengaruh Kompetisi Perbankan terhadap Stabilitas Keuangan: Pengujian Hipotesis Competition-Stability vs. Competition-Fragility Saputro, Siswono Ardi; Safuan, Sugiharso
Jurnal Ikatan Sarjana Ekonomi Indonesia Vol 13 No 1 (2024): April
Publisher : Jurnal Ekonomi Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.52813/jei.v13i1.519

Penelitian ini menguji dua hipotesis dalam persaingan perbankan, yaitu competition stability dan competition-fragility di lima negara Asia Tenggara pada periode Masyarakat Ekonomi Asia dan dampak pandemi COVID-19 pada periode 2011–2022. Industri perbankan di Asia Tenggara telah mengalami pertumbuhan pesat konsolidasi bank, merger, dan akuisisi. Untuk tujuan investigasi ini, penulis menggunakan metode Merton distance to default dan Z-score sebagai pengukuran stabilitas keuangan dan menggunakan kompetisi Lerner index untuk pasar loan bank dan pasar deposit untuk mengevaluasi persaingan di industri perbankan. Penulis menemukan bahwa kedua hipotesis terjadi di industri perbankan Asia Tenggara, market power dapat mendorong stabilitas perbankan sementara tidak stabil dalam volatilitas pendapatan bank dan persaingan perbankan dapat membuat pendapatan dari operasi perbankan stabil untuk pasar loan, tetapi rentan terhadap risiko default.

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