Can technological innovation spur economic development? The case of Indonesia
Purpose: Innovation in digital technologies has been the main force in promoting growth and inclusion. However, the impact of such innovations remains ambiguous. Within this context, this study aims to analyze the distribution of digitally empowered peer-to-peer (P2P) lending in Indonesia. Design/me...
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| Format: | Article |
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Emerald Publishing
2023
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| _version_ | 1797037474534391808 |
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| author | Junarsin, E. Hanafi, M.M. Iman, N. Arief, U. Naufa, A.M. Mahastanti, L. Kristanto, J. |
| author_facet | Junarsin, E. Hanafi, M.M. Iman, N. Arief, U. Naufa, A.M. Mahastanti, L. Kristanto, J. |
| author_sort | Junarsin, E. |
| collection | UGM |
| description | Purpose: Innovation in digital technologies has been the main force in promoting growth and inclusion. However, the impact of such innovations remains ambiguous. Within this context, this study aims to analyze the distribution of digitally empowered peer-to-peer (P2P) lending in Indonesia. Design/methodology/approach: This study uses a quantitative approach to estimate the impact of technological innovation in promoting economic development. In particular, this study employs empirical panel data from 135 financial technology (FinTech) companies from 2015 to 2019 and use the dynamic panel threshold regression approach. This study collects secondary data to build the estimated model. Findings: Contrary to conventional wisdom, this study�s evidence suggests that there is a delayed effect between the contribution of P2P lending by FinTech firms on economic growth in the country. While the immense growth of FinTech seems promising, the findings indicate that FinTech is far from its optimal point. This study calculates the optimal combination between productive and consumptive lending and between Java and non-Java. In view of this finding, this study proposes strategies to effectively distribute lending and bring about the expected benefit to the economy. Practical implications: Since the contribution of P2P lending on economic development has not reached its optimum, the findings expose the limitation of current technological innovation in the financial sectors. In this sense, P2P penetration on the financing market needs encouragement. The calculations for optimal allocation between productive and consumptive and between Java and non-Java provide guidance to policymakers. This study helps practitioners to shape strategy and to begin experimenting with different approaches to distribute loans effectively. Originality/value: To the best of the authors� knowledge, there are no empirical studies that examine the impact of emerging FinTech companies in promoting economic growth and financial development. The findings close this research gap, especially in regard to innovation management literature, and provide insights for practitioners, policymakers and regulators. © 2021, Emerald Publishing Limited. |
| first_indexed | 2024-03-14T00:03:53Z |
| format | Article |
| id | oai:generic.eprints.org:281680 |
| institution | Universiti Gadjah Mada |
| last_indexed | 2024-03-14T00:03:53Z |
| publishDate | 2023 |
| publisher | Emerald Publishing |
| record_format | dspace |
| spelling | oai:generic.eprints.org:2816802023-11-10T08:43:26Z https://repository.ugm.ac.id/281680/ Can technological innovation spur economic development? The case of Indonesia Junarsin, E. Hanafi, M.M. Iman, N. Arief, U. Naufa, A.M. Mahastanti, L. Kristanto, J. Economic Development and Growth Purpose: Innovation in digital technologies has been the main force in promoting growth and inclusion. However, the impact of such innovations remains ambiguous. Within this context, this study aims to analyze the distribution of digitally empowered peer-to-peer (P2P) lending in Indonesia. Design/methodology/approach: This study uses a quantitative approach to estimate the impact of technological innovation in promoting economic development. In particular, this study employs empirical panel data from 135 financial technology (FinTech) companies from 2015 to 2019 and use the dynamic panel threshold regression approach. This study collects secondary data to build the estimated model. Findings: Contrary to conventional wisdom, this study�s evidence suggests that there is a delayed effect between the contribution of P2P lending by FinTech firms on economic growth in the country. While the immense growth of FinTech seems promising, the findings indicate that FinTech is far from its optimal point. This study calculates the optimal combination between productive and consumptive lending and between Java and non-Java. In view of this finding, this study proposes strategies to effectively distribute lending and bring about the expected benefit to the economy. Practical implications: Since the contribution of P2P lending on economic development has not reached its optimum, the findings expose the limitation of current technological innovation in the financial sectors. In this sense, P2P penetration on the financing market needs encouragement. The calculations for optimal allocation between productive and consumptive and between Java and non-Java provide guidance to policymakers. This study helps practitioners to shape strategy and to begin experimenting with different approaches to distribute loans effectively. Originality/value: To the best of the authors� knowledge, there are no empirical studies that examine the impact of emerging FinTech companies in promoting economic growth and financial development. The findings close this research gap, especially in regard to innovation management literature, and provide insights for practitioners, policymakers and regulators. © 2021, Emerald Publishing Limited. Emerald Publishing 2023 Article PeerReviewed Junarsin, E. and Hanafi, M.M. and Iman, N. and Arief, U. and Naufa, A.M. and Mahastanti, L. and Kristanto, J. (2023) Can technological innovation spur economic development? The case of Indonesia. Journal of Science and Technology Policy Management, 14 (1). pp. 25-52. ISSN 20534620 https://www.emerald.com/insight/publication/issn/2053-4620 https://doi.org/10.1108/JSTPM-12-2020-0169 |
| spellingShingle | Economic Development and Growth Junarsin, E. Hanafi, M.M. Iman, N. Arief, U. Naufa, A.M. Mahastanti, L. Kristanto, J. Can technological innovation spur economic development? The case of Indonesia |
| title | Can technological innovation spur economic development? The case of Indonesia |
| title_full | Can technological innovation spur economic development? The case of Indonesia |
| title_fullStr | Can technological innovation spur economic development? The case of Indonesia |
| title_full_unstemmed | Can technological innovation spur economic development? The case of Indonesia |
| title_short | Can technological innovation spur economic development? The case of Indonesia |
| title_sort | can technological innovation spur economic development the case of indonesia |
| topic | Economic Development and Growth |
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