Islamic Bank Financing: Finding the Spatial Effect and Influencing Factors from an Archipelagic Indonesia

Author : M Arief Mufraini (Universitas Islam Negeri Syarif Hidayatullah Jakarta), Ahmad Tibrizi Soni Wicaksono (Universitas Islam Negeri Maulana Malik Ibrahim Malang), Kurniawati Meylianingrum (Universitas Islam Negeri Maulana Malik Ibrahim Malang), Mega Noerman Ningtyas (Universitas Islam Negeri Maulana Malik Ibrahim Malang), Supriyono (Universitas Islam Negeri Syarif Hidayatullah Jakarta)

Abstract : In the light of Islamic bank inclusiveness, this study aims to analyse more for spatial regions effect to identify influencing factors of financing. 

Secondary data from 33 provinces of Indonesia took a part to complete research analysis. The findings of the research reveal such a strong spatial influence on Islamic bank financing. 

Jakarta and West Java Province ultimately luxuriate high value of financing, but Banten Province enjoy only low value of financing although it surrounded by the high value neighbour provinces, and Papua Province suffer from Islamic bank financing and also surrounded by the low value ones. Then it is found that Indonesia has seven provinces included in the category of neighbour less namely the Provinces of West Nusa Tenggara, North Maluku, Maluku, East Nusa Tenggara, Bali, Bangka Belitung, and Riau Islands. 

And factors that affect geographical spatial concentration of Islamic bank financing are gross domestic product and deposit.

Keywords: spatial regression model; Islamic bank financing and archipelagic Indonesia.

Journal : International Journal of Economic Policy in Emerging Economies Volume 13 Issue 1 2020

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