IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2508.02119.html
   My bibliography  Save this paper

The Role of Digital Payments in Driving Regional Economic Growth: A Panel Data Analysis with Structural Break

Author

Listed:
  • Wishnu Badrawani
  • Citra Amanda
  • Novi Maryaningsih
  • Carla Sheila Wulandari

Abstract

Using a panel payment system dataset of thirty-three provinces in Indonesia, we examine the impact of digital payment on the regional economy, considering structural breaks induced by unprecedented events and policies. Digital payments were determined to significantly affect regional income and consumption before and after the identified breakpoint, with the impact greater following the break. Employing a novel method for structural break analysis within interactive effects panel data, we demonstrate that the break in retail payment models is due to COVID-19, and the break in the wholesale payment model is associated with the central bank's payment system policy.

Suggested Citation

  • Wishnu Badrawani & Citra Amanda & Novi Maryaningsih & Carla Sheila Wulandari, 2025. "The Role of Digital Payments in Driving Regional Economic Growth: A Panel Data Analysis with Structural Break," Papers 2508.02119, arXiv.org.
    • Handle: RePEc:arx:papers:2508.02119
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2508.02119
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Susana Martín Belmonte & Jordi Puig & Mercè Roca & Marta Segura, 2021. "Crisis Mitigation through Cash Assistance to Increase Local Consumption Levels—A Case Study of a Bimonetary System in Barcelona, Spain," JRFM, MDPI, vol. 14(9), pages 1-17, September.
    2. Biswajit Patra & Narayan Sethi, 2024. "Does digital payment induce economic growth in emerging economies? The mediating role of institutional quality, consumption expenditure, and bank credit," Information Technology for Development, Taylor & Francis Journals, vol. 30(1), pages 57-75, January.
    3. Rui Zhou, 2022. "Sustainable Economic Development, Digital Payment, and Consumer Demand: Evidence from China," IJERPH, MDPI, vol. 19(14), pages 1-20, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mercè Roca & Marta Segura & Jordi Puig & Susana Martín Belmonte, 2024. "The local multiplier of income support paid in a complementary currency: Comparative evaluation in the city of Barcelona," Urban Studies, Urban Studies Journal Limited, vol. 61(1), pages 95-111, January.
    2. Wei Li & Hui Wang & Lu Zhang & Runchen Liu, 2023. "Digital inclusive finance, consumer consumption and high-quality economic development," PLOS ONE, Public Library of Science, vol. 18(8), pages 1-22, August.
    3. Jérôme Blanc, 2024. "Money and the ecological turn: lessons from alternative currencies," Post-Print halshs-04513773, HAL.
    4. Anran Dai & Shaoan Huang, 2025. "Online Payment Technological Innovation and Changes in Household Saving Rate: Evidence From China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(6), pages 3571-3590, September.
    5. Reyns, Ariane, 2024. "What drives businesses to transact with complementary currencies?," Ecological Economics, Elsevier, vol. 220(C).
    6. Criscione, Teodoro & Guterman, Eve & Avanzo, Sowuelu & Linares, Julio, 2022. "Community currency systems: Basic income, credit clearing, and reserve-backed. Models and design principles," FRIBIS Discussion Paper Series 04-2022, University of Freiburg, Freiburg Institute for Basic Income Studies (FRIBIS).
    7. Birigozzi, Andrea & De Silva, Cristina & Luitel, Prabesh, 2025. "Digital payments and GDP growth: A behavioural quantitative analysis," Research in International Business and Finance, Elsevier, vol. 75(C).
    8. Umar, Muhammad & Shahzad, Fakhar & Iqbal, Amjad & Tong, Fanghua, 2024. "Does institutional quality matter for central bank digital currency adoption?," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 378-389.
    9. He Li & Nurhafiza Abdul Kader Malim & Xiaojun Xie & Xuyang Du, 2025. "Interaction Effects of Green Finance and Digital Platforms on China’s Economic Growth," Sustainability, MDPI, vol. 17(18), pages 1-16, September.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2508.02119. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.