Provincial Clustering Based on the Impact of the Financial System on Macroeconomic Stability in Indonesia

Mansyur Asri; Ernawati Ernawati

doi:10.59653/ijmars.v4i01.2178

Authors

Mansyur Asri STMIK Catur Sakti, Indonesia
Ernawati Universitas Halu Oleo, Indonesia

DOI:

https://doi.org/10.59653/ijmars.v4i01.2178

Keywords:

macroeconomic, stability, financial, system, region

Abstract

This research aims to analyze the impact of the financial system on macroeconomic stability. The unit of analysis consisted of 38 Indonesian provinces, and the period was 2024. The research data consisted of secondary data published by the National Research and Innovation Agency (BRIN). The data were analyzed using quantitative descriptive methods, including graphs, percentages, and frequency distributions. The frequency distribution table was used to cluster provinces and map the impact of regional innovation on economic development. The research results show that provinces with a low macroeconomic stability index are located in eastern Indonesia, particularly in Papua. Meanwhile, provinces with weaker financial systems and lower macroeconomic stability include Aceh, Gorontalo, West Sulawesi, Maluku, West Papua, South Papua, Central Papua, and Highland Papua. Almost all of these provinces are located in Eastern Indonesia. Furthermore, the study results show that the financial system has a lesser impact on promoting macroeconomic stability.

Downloads

Download data is not yet available.

References

Adayleh, R. M. (2018). Does Finance – Led Growth Hypothesis Hold in Jordanian Economy? An Empirical Analysis. International Review of Management and Marketing, 8(1).

Ajisafe, R. A., & Okunade, S. O. (2020). Finance-Led-Growth Hypothesis And Domestic Investment In Nigeria A (Ph.D). In Journal of Emerging Trends in Economics and Management Sciences (Vol. 11, Issue 2).

Andjarwati, D. E., & Kusumartono, F. X. H. (2019). Model Dinamika Pengembangan Kota-Kota Di Wilayah Timur Indonesia Dynamic Model of Cities Development in the Eastern Indonesia. Jurnal Sosial Ekonomi Pekerjaan Umum, 11(1).

Asteriou, D., Spanos, K., & Trachanas, E. (2024). Financial development, economic growth and the role of fiscal policy during normal and stress times: Evidence for 26 EU countries. International Journal of Finance and Economics, 29(2). https://doi.org/10.1002/ijfe.2793

BRIN. (2025). Indeks Daya Saing Daerah 2024. https://brin.go.id/drid/page/indeks-daya-saing-daerah

Dewanto, F. W., & Rahmawati, F. (2021). Analisis Ketimpangan Pembangunan Ekonomi Antarwilayah ( Studi di Kawasan Barat Indonesia dan Kawasan Timur Indonesia ) Tahun 2014-. Jurnal Ilmiah Mahasiswa Ekonomi, 4(1).

Duramany-Lakkoh, E. K., Jalloh, M. S., & Jalloh, A. (2022). An Empirical Examination of the Impact of Banks on Economic Growth in Sierra Leone (2001-2017). Journal of Financial Risk Management, 11(02). https://doi.org/10.4236/jfrm.2022.112013

Ernawati. (2019). Pusat pertumbuhan perbankan syariah di indonesia. IMANENSI: Jurnal Ekonomi, Manajemen Dan Akuntansi Islam, 2(2). https://doi.org/10.34202/imanensi.2.2.2017.33-44

Guei, K. M., & Choga, I. (2022). Assessing the finance led growth hypothesis: Empirical evidence from sub-Saharan Africa. African Journal of Science, Technology, Innovation and Development, 14(1). https://doi.org/10.1080/20421338.2020.1815945

Hidayati, I. (2019). Pembangunan Indonesia-sentris: Konektivitas Antar Wilayah. In lipi.go.id.

Huda, S., Yuliati, A., & Setyawan, D. (2025). Revisiting finance-led growth: Evidence from disaggregated bank credit in Indonesia (period 2009–2023). Journal of Economics and Business Letters, 5(5). https://doi.org/10.55942/jebl.v5i5.755

Ibrahim, R. L., Alomair, A., & Al Naim, A. S. (2024). How Financial Development Heterogeneity, Macroeconomic Volatility, Domestic Investment, and Digital Economy Are Driving Sustainable Economic Growth in Africa. Sustainability (Switzerland), 16(21). https://doi.org/10.3390/su16219281

Kachula, S., Zhytar, M., Sidelnykova, L., Perchuk, O., & Novosolova, O. (2022). The Relationship between Economic Growth and Banking Sector Development in Ukraine. WSEAS Transactions on Business and Economics, 19. https://doi.org/10.37394/23207.2022.19.21

Nguyen, P. T. (2022). The Impact of Banking Sector Development on Economic Growth: The Case of Vietnam’s Transitional Economy. Journal of Risk and Financial Management, 15(8). https://doi.org/10.3390/jrfm15080358

Putri, S. A., Nadila, N., Kirana, Y. S., Suhendra, I., & Anwar, C. J. (2025). Financial Deepening and Economic Growth in Indonesia. JAMPARING: Jurnal Akuntansi Manajemen Pariwisata Dan Pembelajaran Konseling, 3(1). https://doi.org/10.57235/jamparing.v3i1.4958

Reddy, K., Mubeen, S., Raju, K. H. H., V., J., & S., M. B. (2023). Does the Performance of Banking Sector Promote Economic Growth? A Time Series Analysis. International Journal of Professional Business Review, 8(6). https://doi.org/10.26668/businessreview/2023.v8i6.2128

Suratman, E. (2017). Catatan Kebijakan: Dana Transfer dan Kesenjangan Wilayah. KOMPAK (Kolaborasi Masyarakat Dan Pelayanan Untuk Kesejahteraan), September.

Trung, N. T. (2025). The impact of GDP growth on banking stability in Vietnam: A PVAR model analysis. Journal of Accounting, Business and Finance Research, 20(2). https://doi.org/10.55217/102.v20i2.996

Tsabita, H., Ahmad, I. S., & Adipradana, D. W. (2025). Klasterisasi Provinsi di Indonesia Berdasarkan Ketimpangan Pembangunan Ekonomi dengan Pendekatan Algoritma K-Means dan DBSCAN. Jurnal Sains Dan Seni ITS, 14(2). https://doi.org/10.12962/j23373520.v14i2.149903

Udo, E. S., Jack, A. E., Abner, I. P., Idogen, K., & Ndubuaku, V. (2019). Finance-led growth and growth-led finance: Evidence from Nigeria economic and financial sector development. Humanities and Social Sciences Letters, 7(4). https://doi.org/10.18488/journal.73.2019.74.191.198