Determinants of Cross Regional Disparity in Financial Deepening: Evidence from Indonesian provinces

Irwan Trinugroho; Agusman Agusman; Moch Doddy Ariefianto; Darsono Darsono; Amine Tarazi

Determinants of Cross Regional Disparity in Financial Deepening: Evidence from Indonesian provinces

Irwan Trinugroho ^{1, *} Agusman Agusman ² Moch Doddy Ariefianto ³ Darsono Darsono ⁴ Amine Tarazi ¹

* Auteur correspondant

1 LAPE - Laboratoire d'Analyse et de Prospective Economique

2 bank indonesia

3 Indonesia Deposit Insurance Corporation

4 Faculty of Agriculture

Abstract : This paper investigates the determinants of financial deepening across regions in Indonesia after the institutional reforms which brought the country to become more decentralized. Using provincial-level data for 33 provinces from 2004 to 2010, we find that poor local governance significantly impedes financial deepening. Our results also conclude that in the socioeconomically less developed regions, the level of financial deepening is lower than that of more developed regions. Various policy implications are provided. Even though decentralization has been implemented, regional disparity in the form of financial deepening still exists. Improving local governance should be imposed to facilitate favorable business environment. Moreover, regulators have to reconsider regulations that have constrained bank lending.

Keywords : Indonesia Financial deepening Socioeconomic Local governance

Type de document :

Article dans une revue

Domaine :

Sciences de l'Homme et Société / Economies et finances

Liste complète des métadonnées

https://hal-unilim.archives-ouvertes.fr/hal-01140209
Contributeur : Thierno Barry <>
Soumis le : mercredi 8 avril 2015 - 10:00:39
Dernière modification le : jeudi 14 mars 2019 - 14:54:04

Determinants of Cross Regional Disparity in Financial Deepening: Evidence from Indonesian provinces

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