•  
  •  
 

Abstract

Sulawesi Island has fairly high economic growth but is not followed by a significant decrease in income inequality. Therefore, a new strategy is needed to overcome these problems, one of them by increasing the role of the financial sector through financial inclusion. This study aims to analyze the relationship between financial inclusion, economic growth, and income inequality, as well as the factors influencing them in Sulawesi Island from 2011 to 2019. The analytical method used is the simultaneous equation model with panel data using the EC2SLS model. The results show that there is a simultaneous relationship between financial inclusion and economic growth and also between economic growth and income inequality. Economic growth has a positive and significant effect on financial inclusion. Financial inclusion, foreign direct investment, and government spending have a positive and significant effect, while income inequality has a negative and significant effect on economic growth. Financial inclusion and inflation have a positive and significant effect, while economic growth has a negative and significant effect on income inequality. Thus, this study can show that financial inclusion can reduce income inequality by promoting economic growth.

References

[1] Aditiya, ASW 2021, Analisis determinan ketimpangan pendapatan di Indonesia tahun 2015-2019 (Skripsi, Fakultas Ekonomi dan Bisnis Universitas Muhammadiyah Surakarta).

[2] Astuti, PW 2018, ‘Analisis pengaruh investasi terhadap pertumbuhan ekonomi (Studi pada 33 Provinsi di Indonesia)’, Jurnal Ilmiah Mahasiswa Fakultas Ekonomi dan Bisnis Universitas Brawijaya, vol. 6, no. 2, 11 p.

[3] Azwar 2016, ‘Peran alokatif pemerintah melalui pengadaan barang/jasa dan pengaruhnya terhadap perekonomian Indonesia’, Kajian Ekonomi dan Keuangan, vol. 20, no. 2, pp. 149-167. doi: https://doi.org/10.31685/kek.v20i2.186.

[4] Baltagi, BH 2005, Econometric analysis of panel data (3rd edition), John Wiley & Sons, Ltd.

[5] Bappenas 2019, Evaluasi akhir RPJMN 2015-2019: Mewujudkan Indonesia yang berdaulat, mandiri, dan berkepribadian, Kementerian Perencanaan Pembangunan Nasional/Badan Perencanaan Pembangunan Nasional. viewed 22 May 2022, .

[6] Beck, T, Demirgüç-Kunt, A, & Levine, R 2007, ‘Finance, inequality and the poor’, Journal of Economic Growth, vol. 12, pp. 27-49. doi: https://doi.org/10.1007/s10887-007-9010-6.

[7] BI 2014, Booklet financial inclusion, Bank Indonesia.

[8] BI 2020a, Keuangan inklusif, Bank Indonesia. viewed 17 January 2022, .

[9] BI 2020b, Laporan perekonomian Provinsi Sulawesi Tengah periode Februari 2020, Kantor Perwakilan Bank Indonesia Provinsi Sulawesi Tengah, viewed 20 May 2022, .

[10] Bourguignon, F 2004, ‘The poverty-growth-inequality triangle’, Working Paper, 125, Indian Council for Research on International Economic Relations (ICRIER). viewed 20 April 2022, .

[11] BPS 2020, 15 Juli, ‘Tingkat ketimpangan pengeluaran penduduk Indonesia Maret 2020’, Berita Resmi Statistik, No. 57/07/Th. XXIII, Badan Pusat Statistik.

[12] BPS 2021, Produk domestik regional bruto provinsiprovinsi di Indonesia menurut pengeluaran, 2016-2020, Badan Pusat Statistik.

[13] Busainah, H 2020, Analisis keterkaitan simultan inklusi keuangan, pertumbuhan ekonomi, dan kemiskinan di kawasan barat dan timur Indonesia tahun 2012-2017, Politeknik Statistika STIS.

[14] Cahyadin, M 2020, ‘The linkage between globalisation and financial inclusion: Do inequality and institutions matter?’, Economic Journal of Emerging Markets, vol. 12, no. 2, pp. 220-233. doi: https://doi.org/10.20885/ejem.vol12.iss2.art8.

[15] Chakravarty, SR & Pal, R 2013, ‘Financial inclusion in India: An axiomatic approach’, Journal of Policy Modeling, vol. 35, no. 5, pp. 813-837. doi: https://doi.org/10.1016/j.jpolmod.2012.12.007.

[16] Chow, SC, Vieito, JP, & Wong, WK 2018, ‘Do both demandfollowing and supply-leading theories hold true in developing countries?’, MPRA Paper, 87641, Munich Personal RePEc Archive. viewed 3 May 2022, .

[17] Claessens, S & Perotti, E 2007, ‘Finance and inequality: Channels and evidence’, Journal of Comparative Economics, vol. 35, no. 4, pp. 748-773. doi: https://doi.org/10.1016/j.jce.2007.07.002.

[18] Demirguc-Kunt, A &d Klapper, L 2012, ‘Measuring financial inclusion: The global findex database’, Policy Research Working Paper, 6025. World Bank. viewed 3 May 2022, .

[19] Deyshappriya, NPR 2017, ‘Impact of macroeconomic factors on income inequality and income distribution in Asian countries’, ADBI Working Paper Series, 696, Asian Development Bank Institute. viewed 29 May 2022, .

[20] Dhrifi, A 2015, ‘Financial development and the" Growth- Inequality-Poverty" triangle’, Journal of the Knowledge Economy, vol. 6, no. 4, pp. 1163-1176. doi: https://doi.org/10.1007/s13132-014-0200-0.

[21] Dinh, TTH, Vo, DH, Vo, AT, & Nguyen, TC 2019, ‘Foreign direct investment and economic growth in the short run and long run: Empirical evidence from developing countries’, Journal of Risk and Financial Management, vol. 12, no. 4, p. 176. doi: https://doi.org/10.3390/jrfm12040176.

[22] Easterly, W & Fischer, S 2001, ‘Inflation and the poor’, Journal of Money, Credit, and Banking, vol. 33, no. 2, pp. 160-178. doi: https://doi.org/10.2307/2673879.

[23] Erlando, A, Riyanto, FD, & Masakazu, S 2020, ‘Financial inclusion, economic growth, and poverty alleviation: Evidence from eastern Indonesia’, Heliyon, vol. 6, no. 10, p. e05235. doi: https://doi.org/10.1016/j.heliyon.2020.e05235.

[24] Evans, O & Adeoye, B 2016, ‘Determinants of financial inclusion in Africa: A dynamic panel data approach’, University of Mauritius Research Journal, vol. 22, pp. 310-336. doi: https://doi.org/10.6084/M9.FIGSHARE.3409738.

[25] Greene, WH 2012, Econometric analysis (7th edition), Pearson Education Limited.

[26] Greenwood, J & Jovanovic, B 1990, ‘Financial development, growth, and the distribution of income’, Journal of Political Economy, vol. 98, no. 5 (Part 1), pp. 1076–1107. doi: https://doi.org/10.1086/261720.

[27] Gujarati, DN & Porter, DC 2009, Basic econometrics (5th edition), McGraw-Hill.

[28] Haloho, DRM 2019, Analisis kausalitas inklusi keuangan dengan pemerataan pendapatan, kemiskinan, pertumbuhan ekonomi, dan pengangguran di Indonesia (Skripsi, Fakultas Ekonomi dan Bisnis Universitas Sumatera Utara).

[29] Hapsari, SAD, Hutagaol, MP, & Asmara, A 2013, ‘Pertumbuhan inklusif: Fenomena pertumbuhan inklusif di kawasan Indonesia bagian barat dan Indonesia bagian timur’, Jurnal Ekonomi dan Kebijakan Pembangunan, vol. 2, no. 2, pp. 85-112. doi: https://doi.org/10.29244/jekp.2.2.85-112.

[30] Huang, HC(R), Lin, YC & Yeh, CC 2009, ‘Joint determinations of inequality and growth’, Economics Letters, vol. 103, no. 3, pp. 163-166. doi: https://doi.org/10.1016/j.econlet.2009.03.010.

[31] Jalilian, H & Kirkpatrick, C 2005, ‘Does financial development contribute to poverty reduction?’, Journal of Development Studies, vol. 41, no. 4, pp. 636-656. doi: https://doi.org/10.1080/00220380500092754.

[32] Karim, ZA, Nizam, R, Law, SH, & Hassan, MK 2022, ‘Does financial inclusiveness affect economic growth? New evidence using a dynamic panel threshold regression’, Finance Research Letters, vol. 46 (Part A), p. 102364. doi: https://doi.org/10.1016/j.frl.2021.102364.

[33] Kavya, TB & Shijin, S 2020, ‘Economic development, financial development, and income inequality nexus’, Borsa Istanbul Review, vol. 20, no. 1, pp. 80-93. doi: https://doi.org/10.1016/j.bir.2019.12.002.

[34] Kemenkeu 2017, ‘Resep atasi ketimpangan ekonomi’, Media Keuangan Transparasi Informasi Kebijakan Fiskal, Kementerian Keuangan Republik Indonesia.

[35] Kemenkeu 2018a, Kajian fiskal regional Provinsi Sulawesi Barat tahun 2018, Kanwil Ditjen Perbendaharaan Provinsi Sulawesi Barat, Kementerian Keuangan. viewed 22 May 2022, .

[36] Kemenkeu 2018b, Kajian fiskal regional Provinsi Gorontalo tahun 2018, Kanwil Ditjen Perbendaharaan Provinsi Gorontalo, Kementerian Keuangan. viewed 21 May 2022, .

[37] Kemenkeu 2019, Kajian fiskal regional Provinsi Sulawesi Barat tahun 2019, Kanwil Ditjen Perbendaharaan Provinsi Sulawesi Barat, Kementerian Keuangan. viewed 22 May 2022, .

[38] Kim, DW, Yu, JS & Hassan, MK 2018, ‘Financial inclusion and economic growth in OIC countries’, Research in International Business and Finance, vol. 43, pp. 1-14. doi: https://doi.org/10.1016/j.ribaf.2017.07.178.

[39] Kurniasih, EP 2017, ‘Effect of economic growth on income inequality, labor absorption, and welfare in Indonesia’, Economic Journal of Emerging Markets, vol. 9, no. 2, pp. 181- 188. doi: https://doi.org/10.20885/ejem.vol9.iss2.art7.

[40] Lan, HH & Thuong, PTH 2019, ‘Financial inclusion and income inequality: Empirical evidence from transition economies’, Journal of Economics and Development, vol. 21, Special Issue, pp. 23-34. doi: https://doi.org/10.33301/2019.jed.spi.02.

[41] Mankiw, NG 2015, Macroenomics (9th edition), Worth Publisher.

[42] Marisa, A, Majid, MSA & Dawood, TC 2019, ‘How important are the government expenditure and bank lending in promoting regional economic growth?’, East African Scholars Journal of Economics, Business, and Management, vol. 2, no. 3, pp. 117-123. doi: 10.36349/easjebm. 2019.v02i03.004.

[43] Mehrotra, AN & Yetman, J 2015, ‘Financial inclusion – issues for central banks’, BIS Quarterly Review March, pp. 83-96. Bank for International Settlements.

[44] Mocan, HN 1999, ‘Structural unemployment, cyclical unemployment, and income inequality’, Review of Economics and Statistics, vol. 81, no. 1, pp. 122-134. doi: https://doi.org/10.1162/003465399767923872.

[45] Nasution, LZ 2021, ‘Penguatan peran sektor keuangan bagi percepatan pemerataan kesejahteraan’, Journal of Regional Economics Indonesia, vol. 2, no. 1, pp. 71-91. doi: https://doi.org/10.26905/jrei.v2i1.6183.

[46] Neaime, S & Gaysset, I 2018, ‘Financial inclusion and stability in MENA: Evidence from poverty and inequality’, Finance Research Letters, vol. 24, pp. 230-237. doi: https://doi.org/10.1016/j.frl.2017.09.007.

[47] OECD 2017, PISA 2015 assessment and analytical framework: Science, reading, mathematic, financial literacy and Collaborative Problem Solving (revised edition), OECD Publishing. doi: http://dx.doi.org/10.1787/9789264281820- en.

[48] Omar, MA, & Inaba, K 2020, ‘Does financial inclusion reduce poverty and income inequality in developing countries? A panel data analysis’, Journal of Economic Structures, vol. 9, no. 1, p. 37. doi: https://doi.org/10.1186/s40008-020-00214-4.

[49] OJK 2017, Strategi nasional literasi keuangan Indonesia (revisit 2017), Otoritas Jasa Keuangan. viewed 24 November 2021, .

[50] OJK 2020a, Laporan implementasi program kerja TPAKD tahun 2019 dan arah kebijakan tahun 2020, Otoritas Jasa Keuangan. viewed 13 April 2022, .

[51] OJK 2020b, Survei nasional literasi dan inklusi keuangan 2019, Otoritas Jasa Keuangan. viewed 1 December 2021, .

[52] Park, CY & Mercado Jr, R 2018, ‘Financial inclusion, poverty, and income inequality’, The Singapore Economic Review, vol. 63, no. 1, pp. 185-206. doi: https://doi.org/10.1142/S0217590818410059.

[53] Patrick, HT 1966, ‘Financial development and economic growth in underdeveloped countries’, Economic Development and Cultural Change, vol. 14, no. 2, pp. 174-189. doi: https://doi.org/10.1086/450153.

[54] Rafeeq, A 2018, Determinants of financial inclusion in high income and low income countries (Masters Thesis, Capital University of Science and Technology, Islamabad).

[55] Rahman, MM & Alam, K 2021, ‘Exploring the driving factors of economic growth in the world’s largest economies’, Heliyon, vol. 7, no. 5, e07109. doi: https://doi.org/10.1016/j.heliyon.2021.e07109.

[56] Sarma, M 2012, ‘Index of financial inclusion – A measure of financial sector inclusiveness’, Working Paper, 07/2012, Berlin Working Papers on Money, Finance, Trade and Development. in cooperation with DAAD partnership on economic development studies & Hochschule für Technik und Wirtschaft HTW Berlin - University of Applied Sciences. viewed 23 January 2022, .

[57] Sethi, D & Acharya, D 2018, ‘Financial inclusion and economic growth linkage: Some cross country evidence’, Journal of Financial Economic Policy, vol. 10, no. 3, pp. 369-385. doi: https://doi.org/10.1108/JFEP-11-2016-0073.

[58] Seven, U & Coskun, Y 2016, ‘Does financial development reduce income inequality and poverty? Evidence from emerging countries’, Emerging Markets Review, vol. 26, pp. 34-63. doi: https://doi.org/10.1016/j.ememar.2016.02.002.

[59] Sharma, D 2016, ‘Nexus between financial inclusion and economic growth: Evidence from the emerging Indian economy’, Journal of Financial Economic Policy, vol. 8, no. 1, pp. 13-36. doi: https://doi.org/10.1108/JFEP-01-2015-0004.

[60] Shen, Y, Hu, W, & Hueng, CJ 2021, ‘Digital financial inclusion and economic growth: A cross-country study’, Procedia Computer Science, vol. 187, pp. 218-223. doi: https://doi.org/10.1016/j.procs.2021.04.054.

[61] Sosilawati, Nababan, ML, Wahyudi, AR, Mahendra, ZA, ..... & Mona, HLL 2017, Sinkronisasi program dan pembiayaan pembangunan jangka pendek 2018-2020: Keterpaduan pengembangan kawasan dengan infrastruktur pekerjaan umum dan perumahan rakyat Pulau Sulawesi. Pusat Pemrograman dan Evaluasi Keterpaduan Infrastruktur PUPR, Badan Pengembangan Infrastruktur Wilayah, Kementerian Pekerjaan Umum dan Perumahan Rakyat.

[62] Todaro, MP & Smith, SC 2015, Economic development (12th edition), Pearson.

[63] Ulfakhirah, D 2019, Pengaruh variabel-variabel sosial ekonomi terhadap ketimpangan distribusi pendapatan di Pulau Sulawesi tahun 2007-2017, Politeknik Statistika STIS.

[64] Ummah, BB, Nuryartono, N, & Anggraeni, L 2015, ‘Analisis inklusi keuangan dan pemerataan pendapatan di Indonesia’, Jurnal Ekonomi dan Kebijakan Pembangunan, vol. 4, no. 1, pp. 1-27. doi: https://doi.org/10.29244/jekp.4.1.2015.1-27.

[65] Van, LTH, Vo, AT, Nguyen, NT, & Vo, DH 2021, ‘Financial inclusion and economic growth: An international evidence’, Emerging Markets Finance and Trade, vol. 57, no. 1, pp. 239-263. doi: https://doi.org/10.1080/1540496X.2019.1697672.

[66] World Bank 2018, Perkembangan triwulanan perekonomian Indonesia, menuju pertumbuhan inklusif, Maret 2018. viewed 27 October 2021, .

[67] Yang, Y. & Greaney, TM 2017, ‘Economic growth and income inequality in the Asia-Pacific region: A comparative study of China, Japan, South Korea, and the United States’, Journal of Asian Economics, vol. 48, pp. 6-22. doi: https://doi.org/10.1016/j.asieco.2016.10.008.

[68] Yanti, S, Fadliyanti, L & Manan, A 2021, ‘Pengaruh belanja modal, investasi PMDN dan investasi PMA terhadap pertumbuhan ekonomi kabupaten/kota di Provinsi NTB’, Journal of Economics and Business, vol. 7, no. 1, pp. 18- 39. doi: https://doi.org/10.29303/ekonobis.v7i1.67.

[69] Yumna, A, Rakhmadi, MF, Hidayat, MF, Gultom, SE, & Suryahadi, A 2017, ‘Mengestimasi Dampak Ketimpangan terhadap Pertumbuhan dan Pengangguran di Indonesia’, Kertas Kerja SMERU, The SMERU Research Institute. viewed 22 May 2022, .

Download

Share

COinS