Public Ownership and Local Bank Lending at the Onset of the COVID-19 Pandemic: Evidence from Indonesia

26 Pages Posted: 19 Sep 2022

See all articles by Akhmad Susamto

Akhmad Susamto

Universitas Gadjah Mada - Department of Economics

Danes Quirira Octavio

Diponegoro University - Economics and Business Faculty

Tastaftiyan Risfandy

Sebelas Maret University - Faculty of Economics and Business

Dyah Titis Kusuma Wardani

Universitas Muhammadiyah Yogyakarta - Department of Economics

Abstract

This paper empirically analyzes whether the Covid-19 pandemic has brought about a significant impact on the lending of local banks and whether such impact has been different for public as compared to private local banks. Using panel data from 1,344 Bank Perkreditan Rakyat (BPRs) in Indonesia between the first quarter of 2018 and the third quarter of 2021, this paper confirms the negative impact that Covid-19 pandemic has had on local bank lending. This paper also confirms that the impact of the Covid-19 pandemic on lending has been smaller for local banks owned by majority provincial and/or local government shareholders than for local banks owned by private shareholders. These findings are robust and not subject to the choices of proxy for the Covid-19 pandemic, regression estimators, and control variables.

Keywords: Government Ownership, Bank Loans, Credit supply, Covid-19

Suggested Citation

Susamto, Akhmad and Octavio, Danes Quirira and Risfandy, Tastaftiyan and Wardani, Dyah Titis Kusuma, Public Ownership and Local Bank Lending at the Onset of the COVID-19 Pandemic: Evidence from Indonesia. Available at SSRN: https://ssrn.com/abstract=4221750 or http://dx.doi.org/10.2139/ssrn.4221750

Akhmad Susamto (Contact Author)

Universitas Gadjah Mada - Department of Economics ( email )

Jl.Sosio Humaniora No. 1, Bulaksumur
Sleman, DI Yogyakarta 55281
Indonesia
+6281290113275 (Phone)

Danes Quirira Octavio

Diponegoro University - Economics and Business Faculty ( email )

Jl. Prof. Soedharto Tembalang
Semarang, IN Central Java 50275
Indonesia

Tastaftiyan Risfandy

Sebelas Maret University - Faculty of Economics and Business ( email )

Jl. Ir Sutami 36 A, Kentingan
Surakarta, Jawa Tengah 57126
Indonesia

Dyah Titis Kusuma Wardani

Universitas Muhammadiyah Yogyakarta - Department of Economics ( email )

Jl. Brawijaya, Kasihan, Tamantirto, Kasihan
Bantul, ID Daerah Istimewa Yogyakarta 55183
Indonesia
+628112638191 (Phone)

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