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MSMEs as mediation in the effects of investment credit, interest rates, and labor on economic growth: Evidence from Indonesia

Author

Listed:
  • Muliadi Muliadi

    (Department of Economics, Faculty of Economics and Business, Mulawarman University, Samarinda City, Indonesia)

  • Dio Caisar Darma

    (Department of Management, Sekolah Tinggi Ilmu Ekonomi Samarinda, Samarinda City, Indonesia)

  • Jati Kasuma

    (Faculty of Business and Management, University Teknologi MARA (Sarawak),SamarahanCity,Malaysia)

Abstract

An increase in MSMEs in large numbers is very instrumental in increasing economic growth in developing countries, including Indonesia. The research objective is based on identifying the effect of investment credit, interest rates, and labor on economic growth through the role of MSMEs.The design of this research is descriptive-verification to present a structured, factual and accurate picture and test hypotheses empirically through the MRA model.Empirical analysis proves that investment creditand interest rates through the role of MSMEs can influence positively and significantly on Indonesia's economic growth. In other results, it appears that the role of MSMEs is less able to mediate the effect of labor on Indonesia's economic growth. This fact is based on a negative and insignificant relationship.In a sentence or two, enter the implications and limitations of your research. In Indonesia, increasing bank lending to MSMEs in practice is undermined by lending policies by banks and by macroeconomic factors (economic growth, interest rates, investment credit, and labor).From this study, the fulfillment of investment credit, interest rates, and labor needed in the Indonesian economy through MSMEs come from the availability of funds to finance investments that can be collected from various sources of lending and business capital from banks and non-bank institutions.

Suggested Citation

  • Muliadi Muliadi & Dio Caisar Darma & Jati Kasuma, 2020. "MSMEs as mediation in the effects of investment credit, interest rates, and labor on economic growth: Evidence from Indonesia," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 9(2), pages 01-12, April.
    • Handle: RePEc:rbs:ijfbss:v:9:y:2020:i:2:p:01-12
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    References listed on IDEAS

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    9. González-Loureiro, Miguel & Pita-Castelo, Jose, 2012. "A model for assessing the contribution of innovative SMEs to economic growth: The intangible approach," Economics Letters, Elsevier, vol. 116(3), pages 312-315.
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    Cited by:

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    2. Adi Wijaya & Muhammad Awaluddin & A. Erwin Kurniawan, 2022. "The Essence of Fuel and Energy Consumptions to Stimulate MSMEs Industries and Exports: An Empirical Story for Indonesia," International Journal of Energy Economics and Policy, International Journal of Energy Economics and Policy, vol. 12(2), pages 386-393, March.
    3. Rasimikayati, Elly & Karyani, Tuti & Rachmat Saefudin, Bobby, . "Characteristics of Vegetables and Fruit Firms and their Relationship with Business Risk," International Journal of Agriculture and Environmental Research, Malwa International Journals Publication, vol. 9(4).
    4. Cicih Ratnasih & Mohammad Ramadona & Sutrisno Sutrisno, 2022. "The Importance of Driving the Growth of Small and Medium-Sized Micro Enterprises in DKI Jakarta Province," European Journal of Business and Management Research, European Open Science, vol. 7(2), pages 254-257, March.

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