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Cited by 62Monetary Policy and Economic ImpactIncome, Poverty, and InequalityEconomic Growth and Fiscal Policies

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Dynamics of Financial Development, Economic Growth, and Poverty Alleviation: The Indonesian Experience

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Dewi, Sovia, Abd. Majid, M. Shabri, Aliasuddin, Kassim, Salina·2018·South East European Journal of Economics and Business
DOI 10.2478/jeb-2018-0002
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Abstract

Although the poverty rate in Indonesia has been declining in the last several years, the rate of poverty decline is slowing down. In order to achieve its poverty reduction target within the stipulated time period, the government has stepped up efforts to enhance the contribution of the financial sector towards poverty reduction. This study aims to empirically explore the interlinkages between financial sector development and poverty reduction in Indonesia. Focusing on annual data covering the period from 1980 to 2015, the study adopts the Autoregressive Distributed Lag (ARDL) cointegration approach to examine the long-run relationship between the variables. The study found that there is a long-run relationship between financial development, economic growth, and poverty reduction in Indonesia. It also documented a unidirectional causality running from the financial sector to poverty reduction and a bidirectional causality between economic growth and poverty reduction. Therefore, policies to ensure the conducive growth of the financial sector would go a long way in promoting the economy, creating employment opportunities, and consequently accelerating poverty eradication

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Metadata

Authors
Dewi, S., Abd. Majid, M. S., Aliasuddin, & Kassim, S.
Affiliations
  • Development Planning Board, West Sumatra, Padang , Indonesia
  • Faculty of Economics and Business, Syiah Kuala University, Syiah Kuala , Indonesia
  • International Islamic University Malaysia (MY)
ORCID
Kassim, Salina
Venue
South East European Journal of Economics and Business
Publisher
Walter de Gruyter GmbH
Published
2018-06-01
Volume
13
Issue
1
Pages
17-30
ISSN
2233-1999 (ISSN-L)
DOI
10.2478/jeb-2018-0002
OpenAlex
W2888743526
Cited by
62
References
1
Citations by year
2026: 3 · 2025: 10 · 2024: 11 · 2023: 10 · 2022: 11 · 2021: 9 · 2020: 7 · 2019: 1
FWCI
8.18
Type
journal article
Language
en
Open access
Licence
Locations
  • South East European Journal of Economics and Business (publishedVersion, cc-by-nc-nd)
  • The International Islamic University Malaysia Repository (The International Islamic University Malaysia) (acceptedVersion)
  • DOAJ (DOAJ: Directory of Open Access Journals) (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
  • Social Sciences › Sociology and Political Science › Income, Poverty, and Inequality
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Fiscal Policies
Keywords
financial development, economic growth, poverty reduction, financial services, causality, long-run relationship, Indonesia, job creation

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CoChat. (2026). Citation check: Dynamics of Financial Development, Economic Growth, and Poverty Alleviation: The Indonesian Experience. https://app.cochat.ai/papers/10.2478/jeb-2018-0002
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Dewi, S., Abd. Majid, M. S., Aliasuddin, & Kassim, S. (2018). Dynamics of Financial Development, Economic Growth, and Poverty Alleviation: The Indonesian Experience. South East European Journal of Economics and Business. https://doi.org/10.2478/jeb-2018-0002