Government Bank & Regional Development Bank: A Sustainable Development Financing Synergy
DOI:
https://doi.org/10.70550/ecif.v2i1.115Keywords:
Sustainable Index, Sustainable Financing, Financing Synergy, Vector Error Correction Model (VECM), Impulse Response Function (IRF)Abstract
Global warming and climate change caused by emissions are currently a priority concern for the world because they will have a direct and significant impact on the survival of all living things. As financial institutions that provide financing to the industrial sector, government banks and regional government banks financing can potentially develop the Indonesian economy while having a negative impact on emissions from industrial sector activities. By adopting the Vector Error Correction Model (VECM), this reserach reveals that government banks and regional government banks have a significant impact to the sustainable development index. However, in addition to the two types of banks only identified as short-term financing, the proportion of influence generated sequentially for government banks and local government banks are only 13% and 11%. Finally, the need for large funds and a long financing repayment period are significant aspects in building a more sustainable industrial and economic climate.
Downloads
References
Asian Development Bank (2023). Asia Small and Medium-Sized Enterprise Monitor 2023: How Small Firms Can Contribute to Resilient Growth in the Pacific Post COVID-19 Pandemic.
Azhgaliyeva, D., Kapoor, A., & Liu, Y. (2020). Green bonds for financing renewable energy and energy efficiency in South-East Asia: a review of policies. Journal of Sustainable Finance and Investment, 10(2), 113–140. https://doi.org/10.1080/20430795.2019.1704160
Bank Indonesia. (2020, July 27). Statistik Ekonomi dan Keuangan Indonesia. Retrieved from https://www.bi.go.id/id/statistik/seki/terkini/moneter/Contents/Default.aspx
Bappenas. (2017). Statistik Lingkungan Hidup Indonesia. Retrieved from https://www.bps.go.id
Bappenas. (2019). Indonesia's Sustainable Developments Projects 2019-2030. Retrieved from https://www.un.org/esa/ffd/ffdforum/wp-content/uploads/sites/3/2019/04/Indonesias-Sustainable-Development-Projects.pdf
Belbute, M. J. (2013). Is the Euro-Area core price index really more persistent than the food and energy price indexes? Research in Economics, 67(2013), 307-315. https://doi.org/10.1016/j.rie.2013.07.003
Bian, J. (2016). An Empirical Study on China’s Real Estate Industry Sustainable Development Based on Entropy Law. Risti, E11(11), 389–394.
Boumparis, P., Milas, C., & Panagiotidis, T. (2019). Non-performing loans sovereign credit ratings. International Review of Financial Analysis, 64(2019), 301-314. https://doi.org/10.1016/j.irfa.2019.06.002
Boztandzic, D., & Weiß, F. N. G. (2018). Why do some banks contribute more to global systemic risk? Journal of Financial Intermediation, 35(2018), 17-40. https://doi.org/10.1016/j.jfi.2018.03.003
Chen, S., Ganum, P., Liu, L., Martinez, L., & Martinez Peria, M. S. (2019). Debt Maturity and the Use of Short-term Debt: Evidence from Sovereigns and Firms. International Monetary Fund.
D'Orazio, P., & Popoyan, L. (2019). Fostering green investments and tackling climate-related financial risks: Which role for macroprudential policies? Ecological Economics, 160(2019), 25-37. https://doi.org/10.1016/j.ecolecon.2019.01.029
Danish, Wang, B., & Wang, Z. (2018). Imported technology and CO2 emission in China: Collecting evidence through bound testing and VECM approach. Renewable and Sustainable Energy Reviews. 82(2018), 4204-4214. https://doi.org/10.1016/j.rser.2017.11.002
Davidson, R., & MacKinnon, G. J. (1993). Estimation and Inference in Econometrics. New York: Oxford University Press.
Dickey, D.A., & Fuller, W.A. (1981). Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root. Econometrica, 49, 1057-1072.
Engle, R. F., & Granger, C. W. J. (1987). Co-Integration and Error Correction: Representation, Estimation and Testing. Econometrica, 55(2), 251–276.
Elliott, G., Rothenberg, T. J., & Stock, J., (1996). Efficient tests for an autoregressive unit root. Econometrica, 64, 813–836.
Galaz, V., Crona, B., Dauriach, A., Scholtens, B., & Steffen, W. (2018). Finance and the Earth system – Exploring the links between financial actors and non-linear changes in the climate system. Global Environmental Change, 53, 296–302. https://doi.org/10.1016/j.gloenvcha.2018.09.008
Gao, W., Cui, W., & Ye, W. (2017). Directed information graphs for the Granger causality of multivariate time series. Physica A, 486(2017), 701-710. https://doi.org/10.1016/j.physa.2017.05.035
Granger. C.W. J. (1986). Developments in the study of cointegrated variables. Oxford Bulletin of Economics and Statistics, 48, 213-228.
Han. C., Wang. Y., & Ning. Y. (2019). Analysis and comparison of the multifractality and efficiency of Chinese stock market: Evidence from dynamics of major indexes in different boards. Physica A, 528(2019), 121305. https://doi.org/10.1016/j.physa.2019.121305
He, L., Liu, R., Zhong, Z., Wang, D., & Xia, Y. (2019). Can green financial development promote renewable energy investment efficiency? A consideration of bank credit. Renewable Energy, 143, 974–984. https://doi.org/10.1016/j.renene.2019.05.059
Herdhayinta, H., & Supriyono, R. A. (2019). Determinants of Bank Profitability: The Case of The Regional Development Bank (BPD Bank) in Indonesia. Journal of Indonesian Economy and Business, 34(1), 1-16. DOI:10.22146/jieb.17331
Huang, Z., Liao, G., & Li, Z. (2019). Loaning scale and government subsidy for promoting green innovation. Technological Forecasting and Social Change, 144, 148–156. https://doi.org/10.1016/j.techfore.2019.04.023
Intergovernmental Panel on Climate Change. (2022). Industry (Chapter 11). In Climate change 2022: Mitigation of climate change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (pp. 1161–1244). Cambridge University Press
Jarque. C., & Bera. A., (1980). Efficient tests for normality, homoscedasticity and serial independence of regression residuals. Econom. Lett. 6, 255–259.
Johansen. S. (1988). Statistical analysis for cointegration vectors. Journal of Economic Dynamics and Control, 12, 231-254.
Johansen. S., & Juselius. K. (1990). Maximum likelihood estimation and inference on cointegration with application to the demand for money. Oxford Bulletin of Economics and Statistics, 52, 169-210.
Jones, G. S., Jones, G. D., Hertova, D. (2008). Enhancing the Role of Regional Development Banks. United Nations, 2008. Retrieved from https://unctad.org/en/Docs/gdsmdpg2420081_en.pdf
Khan, D., Dlima, A., & Masih, A. (2024). Green banking: Strategies for sustainable development. IIPSeries.
Lembaga Negara Republik Indonesia. (2017), Undang-undang Republik Indonesia Nomor 2 Tahun 2017 Tentang Jasa Konstruksi. Retrieved from https://lpjk.net/data_portal_lpjk_lama/download/produk-hukum/UU%20No.%202%20TAHUN%202017%20TENTANG%20JASA%20KONSTRUKSI.pdf
Li. S., Zhang. H., & Yuan. D. (2019). Investor attention and crude oil prices: Evidence from nonlinear Granger causality tests. Energy Economics, (2019). https://doi.org/10.1016/j.eneco.2019.104494
Long Finance and Finacial Center Futures. (2019). The Global Green Finance Index 3. Z/Yen Group and finance watch. https://www.longfinance.net/media/documents/GGFI_3_v1.6.pdf
Lanne, M., & Nyberg, H. (2016). Generalized Forecast Error Variance Decomposition for Linear and Nonlinear Multivariate Models. Oxford Bulletin of Economics and Statistics, 78(4), 595–603. https://doi.org/10.1111/obes.12125
Lech, M. A. (2017). Environmental Protection Expenditures and Effects of Environmental Governance of Sustainable Development in Manufacture Enterprise. Management, Enterprise and Benchmarking in the 21st Century, 2017, 244-257.
Menteri Pertanian Republik Indonesia. (2019), Peraturan Menteri Pertanian Republik Indonesia Nomor 05 Tahun 2019 Tentang Tata Cara Perizinan Berusahan Sektor Pertanian. Menteri Pertanian Republik Indonesia. Retrieved from http://www.bpdp.or.id/wp-content/uploads/2019/05/2019pmtani005.pdf
Menteri Energi dan Sumber Daya Mineral. (2018), Peraturan Menteri Energi dan Sumber Daya Mineral. Republik Indonesia.
Menteri Energi dan Sumber Daya Mineral. (2017), Peraturan Menteri Energi dan Sumber Daya Mineral Republik Indonesia Nomor 12 Tahun 2017 Tentang Pemanfaatan Sumber Energi Terbarukan Untuk Penyediaan Tenaga Listrik. Menteri Energi dan Sumber Daya Mineral Republik Indonesia. Retrieved from https://jdih.esdm.go.id/peraturan/Permen%20ESDM%20Nomor%2012%20Tahun%202017.pdf
Menteri Pertanian Republik Indonesia. (2019). Peraturan Menteri Pertanian Republik Indonesia Nomor 05 Tahun 2019 Tentang Tata Cara Perizinan Berusahan Sektor Pertanian. Menteri Pertanian Republik Indonesia. Retrieved from http://www.bpdp.or.id/wp-content/uploads/2019/05/2019pmtani005.pdf
Ministry of Environment and Forestry. (2018), The State of Indonesia’s Forrests 2018. Ministry of Environment and Forestry Republic of Indonesia. Retrieved from http://perpustakaan.bappenas.go.id/lontar/file?file=digital/191959-%5B_Konten_%5D-Konten%20E2337.pdf
Ministry of Environment and Forestry of Indonesia. (2018). Laporan Inventarisasi Gas Rumah Kaca dan Monitoring, Pelaporan Verivikasi Tahun 2018. Retrieved from http://ditjenppi.menlhk.go.id/reddplus/images/adminppi/dokumen/igrk/lapigrkmrv2018.pdf
Ministry of Foreign Affairs of the Netherlands. (2018). Climate Change Profile Indonesia. Ministry of Foreign Affairs of the Netherlands. Retrieved from www.government.nl
Ministry of National Development Planning. (2019). Roadmap of SDGs Indonesia. Retrieved from https://www.unicef.org/indonesia/reports/roadmap-sdgs-indonesia
Mills. C. T (2019). Applied Time Series Analysis, A Practical Guide to Modeling and Forecasting. Academic Press.
Newton, E. (2022). Key Components of Sustainable Architecture for Apartments. Construction21
Ng, A. W. (2018). From sustainability accounting to a green financing system: Institutional legitimacy and market heterogeneity in a global financial centre. Journal of Cleaner Production, 195, 585–592. https://doi.org/10.1016/j.jclepro.2018.05.250
Österholm, P., & Hjalmarsson, E. (2007). Testing for Cointegration Using the Johansen Methodology When Variables Are Near-Integrated. IMF Working Papers, 07(141), 1. https://doi.org/10.5089/9781451867053.001
Pearson. H. R. T., Brown. S., Murray. L., & Sidman. G. (2017). Greenhouse gas emissions from tropical forest degradation: an underestimated source. Carbon Balance Manage, 12, 3. DOI 10.1186/s13021-017-0072-2
Pao. H. T., & Tsai. C. M. (2011). Multivariate Granger causality between CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries. Energy, 36(2011), 685-693. https://doi.org/10.1016/j.energy.2010.09.041
Pradhan. P. R., & Bagchi. P. T. (2013). Effect of transportation infrastructure on economic growth in India: The VECM approach. Research in Transportation Economics, 38(2013), 139-148. https://doi.org/10.1016/j.retrec.2012.05.008
Riti. S. J., & Shu. Y. (2016). Renewable energy, energy efficiency, and eco-friendly environment (R-E5) in Nigeria. Sustainability and Society, 2016 (6), 13. DOI 10.1186/s13705-016-0072-1.
Rohim, A. F., Nugroho, L., & Fadjarenie, A. (2024). The Influence Of Corporate Governance, Financial Performance, And Company Characteristics On Sustainability Report Disclosure. Business, Management & Accounting Journal (BISMA), 1(1), 61-80. https://doi.org/10.70550/bisma.v1i1.4
Saharjo. H. B., Syaufina. L., Nurhayati. D. A., Putra. I. E., Waldi. D. R., & Wardana. (2018). Pengendalian Kebakaran Hutan dan Lahan. IPB Press.
Sato. A. M., & Vithessonthi. C. (2017). Bank systemic risk and corporate investment: Evidence from the US. International Review of Financial Analysis, 50(2017), 151-163. https://doi.org/10.1016/j.irfa.2017.02.008
Stojanovic, D., & Ilic, B. (2018). Green Financing in the Function of Risk Management. Economic and Social Development: Book of Proceedings, (May), 69–76.
Volz, U. (2015). Towards a Sustainable Financial System in Indonesia. UNEP Inquiry Into the Design of a Sustainable Financial System (pp. 1–49).
Wang, Y., & Zhi, Q. (2016). The Role of Green Finance in Environmental Protection: Two Aspects of Market Mechanism and Policies. In Energy Procedia (Vol. 104, pp. 311–316). Elsevier Ltd. https://doi.org/10.1016/j.egypro.2016.12.053
World Bank Group. (2020). Housing Finance Brief.
Xu. B., & Lin. B. (2017). What cause a surge in China's CO2 emissions? A dynamic vector autoregression analysis. Journal of Cleaner Production, 143(2017). 17-26. https://doi.org/10.1016/j.jclepro.2016.12.159
Yayasan KEHATI. (2018). Berdaya Indonesiaku, Yayasan KEHATI 2018 Annual Report. Retrieved From http://kehati.or.id/laporan-tahunan-kehati/
Yuan, F., & Gallagher, K. P. (2018). Greening Development Lending in the Americas: Trends and Determinants. Ecological Economics, 154, 189–200. https://doi.org/10.1016/j.ecolecon.2018.07.009
Zhang. W., Wang. P., Li. X., & Shen. D. (2018). Multifractal Detrended Cross-Correlation Analysis of the Return-Volume Relationship of Bitcoin Market. Complexity, 2018, DOI:10.1155/2018/8691420.
Zulkafli. H. A., Ahmad. Z., Ermal., & Eky. (2016). The Risk and Return Profiles of SRI in Indonesia: A Study on Sri Kehati Index. Journal of Insurance and Financial Management, 2(2), 1-17.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Economics & Islamic Finance Journal (ECIF)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
