Evaluating Asymmetric Impacts of Islamic Bank Financing on Employment In Indonesia

Cahyono, Eko Fajar
Wan Ngah, Wan Azman Saini
Law, Siong Hok
Mazlan, Nur Syazwani
Ahmad, Mohd Naseem Niaz
Mohhammed, Azali

ETIKONOMI
Vol 24, No 1 (2025)

Research Originality: This research examines the asymmetric impact of Islamic bank financing on employment in IndonesiaResearch Objectives:. This research aims to test the nolinear impact (gn) of Islamic bank financing on employment in IndonesiaResearch Methods: This research utilizes secondary data from 2006 to 2022 and employs non-linear ARDL (Auto Regressive Distributive Lag) and Conditional ECM (Error Correction Model) analysis methodsEmpirical Results: In the short term, increases in Islamic bank financing significantly boost labor force participation (LFPR), while decreases have no significant effects. Long-term analysis shows positive changes continue to enhance LFPR, but negative changes do not impact GDP. The impact of financing on LFPR is symmetrical over time, indicating short-term asymmetries do not persistImplications: This research implies that the Indonesian government can boost the growth of Islamic bank financing to increase employment opportunities for the population both in the short and long term.JEL Classification: E24, G21,C32How to Cite:Cahyono, E. F., Ngah, W. A. S. W., Law, S. H., Mazlan, N. S., Ahmad, M. N. N., & Mohhamed, A. (2025). Evaluating Asymmetric Impacts of Islamic Bank Financing on Employment in Indonesia. Etikonomi, 24(1), 31 – 52. https://doi.org/10.15408/etk.v24i1.40139.