This study's contribution to literature is presenting empirical evidence on the impact of financial inclusion, meaning elimination of barriers to accessing financial services, on poverty at the household level in developing countries, using Indonesia as a case study. This is a significant problem for developing countries such as Indonesia, which faces high poverty, even though it has achieved rapid financial development. Using the Binary Logistic (Logit) model and data from approximately 300,000 households from the 2017 Indonesian National Social and Economic Survey (Susenas), this research reveals that financial inclusion decreases households' probability of absolute poverty. Furthermore, financial inclusion can compensate for a lack of assets, a limited number of non-agriculture occupational opportunities in rural areas, and low education levels of household heads. In addition, financial inclusion has the potential to reduce incentives for poor, low-skilled rural people to migrate to urban areas in search of non-agricultural employment opportunities. Policy recommendations based on the results found are twofold. First, for people who are vulnerable to poverty, financial inclusion should be enhanced, especially for poor women-headed farming households in rural areas. Second, for policy-makers concerned with urbanization of low-skilled poor migrants, enhancing financial inclusion in rural areas is needed to help reduce urbanization pressures.
Indonesia has made the tourism sector one of its current development priorities. However, the Covid-19 pandemic has harmed various economic sectors, and the tourism sector is the most affected in Indonesia. As a result of policies carried out by various countries including Indonesia, such as lockdown, social distancing, and its kind, economic activity has slowed, tourist arrivals have decreased drastically, and investment has decreased due to the uncertainty caused by the pandemic. This study aims to examine the effect of the Covid-19 pandemic on tourist arrivals and investment (domestic and foreign investment) and its impact on the economic growth of the tourism sector in Indonesia. This study uses the path analysis method by using mediating variables, namely tourist arrivals, and investment paths. Panel data regression is used to regress the path analysis equation, with data series 2018q1 – 2021q2 and cross-sections in 22 provinces in Indonesia that have tourist entrances.
Purpose The purpose of this study is to empirically analyze the role of sukuk in the monetary policy transmission mechanism through the asset price and exchange rate channels in the Indonesian economy. Design/methodology/approach Using the monthly data from January 2003 to November 2017, this study uses a multivariate vector error correction model causality framework. To examine the role of sukuk in the monetary policy transmission mechanism through the asset price channel, this study uses the variables of consumption, inflation, interest rates, economic growth and the composite stock price index. Meanwhile, to examine the role of sukuk in the monetary policy transmission mechanism through the exchange rate channel, this study used variables of inflation, interest rates, economic growth, foreign investment and exchange rate. Findings This study documented that sukuk has no causal relationship with inflation through asset price and exchange rate channels. Nevertheless, sukuk has a bidirectional causal relationship with economic growth through asset price and exchange rate channels. Sukuk is also documented to have a causal relationship with monetary policy variables of interest rate and stock prices through asset price and exchange rate channels. Finally, a unidirectional causality is recorded running from the exchange rate to sukuk in the exchange rate channel. Research limitations/implications The finding of independence of the sukuk market from interest rates provides evidence that the trading of the sukuk in Indonesia has been in harmony with the Islamic tenets. Practical implications The relevant Indonesian authorities need to enhance both domestic and global sukuk markets as part of efforts to promote the sustainability of Islamic capital market development in Indonesia. Originality/value To the best of the authors’ knowledge, this study is among the first attempts to empirically investigate the role of sukuk in monetary policy transmission through asset price and exchange rate channels in the context of the Indonesian economy.
The study aim is to analyze how the effects of fiscal decentralization and Human Development Index (HDI) on poverty in Indonesia. This study employ secondary data in the form of time series from 2010 to 2017, and cross section data consisting of 33 provinces in Indonesia, so that the type of polled data can be categorized that is a combination of time series data (for 8 years) with cross section data 33 Province in Indonesia. The analytical method used is PLS (Panel Least Square) with a comparison of two models namely the Fixed Effect and Robust Least Square models. From the results of the Fixed Effect regression model shows that DDF has a negative and insignificant effect on Poverty, while HDI has a negative and significant effect on Poverty. The study found that each additional unit of DDF reduced poverty by 10.97 percent if the HDI remains. In addition, the Human Development Index unit reduced the number of poor by 79.83 percent if the DDF remains. These findings implied that to reduce the poverty, efforts to improve HDI need to be focused.
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