Bank lending behavior and business cycle in dual banking system : evidence from Indonesia
Joint Authors
Sakti, Muhammad Rizqi Prima
Zulkhibri, Muhammad
Source
Islamic Research and Training Institute
Issue
Vol. 2018, Issue 2-6 (31 Dec. 2018), pp.1-18, 18 p.
Publisher
Islamic Development Bank (IDB) Islamic Research and Training Institute (IRTI)
Publication Date
2018-12-31
Country of Publication
Saudi Arabia
No. of Pages
18
Main Subjects
Financial and Accounting Sciences
Abstract EN
This study examines bank-lending channel over the business cycle for Indonesian dual banking system by ascertaining to what extent Islamic banks have a role in the credit smoothing.
In this context, we utilize Indonesian dual banking system unbalanced panel data for the period 2001-2015.
By employing two-step dynamic GMM estimators, the study shows that the bank lending behaviour are procyclical.
However, when we categorize the lending behaviour into conventional and Islamic banks, the cyclicality of bank lending affects only conventional banks.
As for the Islamic banks, the business cycle does not affect their financing decision.
Specifically, large Islamic banks are more counter-cyclical in their financing behavior than small and medium size Islamic banks.
Robustness tests using different measures of loans and model specifications confirm the results that Islamic bank is more stable and less procyclical in the case of Indonesian banking system.
American Psychological Association (APA)
Zulkhibri, Muhammad& Sakti, Muhammad Rizqi Prima. 2018. Bank lending behavior and business cycle in dual banking system : evidence from Indonesia. Islamic Research and Training Institute،Vol. 2018, no. 2-6, pp.1-18.
https://search.emarefa.net/detail/BIM-832843
Modern Language Association (MLA)
Zulkhibri, Muhammad& Sakti, Muhammad Rizqi Prima. Bank lending behavior and business cycle in dual banking system : evidence from Indonesia. Islamic Research and Training Institute No. 2-6 (2018), pp.1-18.
https://search.emarefa.net/detail/BIM-832843
American Medical Association (AMA)
Zulkhibri, Muhammad& Sakti, Muhammad Rizqi Prima. Bank lending behavior and business cycle in dual banking system : evidence from Indonesia. Islamic Research and Training Institute. 2018. Vol. 2018, no. 2-6, pp.1-18.
https://search.emarefa.net/detail/BIM-832843
Data Type
Journal Articles
Language
English
Notes
General Note.
Record ID
BIM-832843