Financial Development (FD) is part of a private sector development strategy to stimulate economic growth and reduce poverty, as well as address the "costs" incurred in the financial system. As one indicator, domestic credit to the private sector refers to financial resources provided to the private sector by financial companies, such as through loans, purchases of nonquity securities, and other trade and receivables loans, which establish claims for repayment. Innovation, economic growth and internet use are three things that are closely related to FD. Therefore, the main purpose of this study is to identify the influence of innovation, economic growth and internet use on the domestic credit of three groups of countries, including developing countries and developed countries in Asia and Oceania, as well as ASEAN member groups. Panel data was used in this study and some linear regression analysis was used as an analytical model. The results showed that on domestic credit, FDI as one of the indicators of innovation only has a positive influence on the ASEAN group of member states, economic growth has a different influence on each group of countries, and the use of the internet has a positive influence on the group of developing countries and ASEAN member countries.

Keywords: domestic credit, economic growth, financial development, innovation, internet use



  1. Altay, B. & Topcu, M. (2017). Re-Examining the Impact of Financial System on Economic Growth: New Evidence from Heterogeneous Regional Panels. Handbook of Research on Global Enterprise Operations and Opportunities, 1, 1-16. doi: 10.4018/978-1-5225-2245-4.ch001
  2. Amadeo, K. (2020). Economic Growth, Its Measurements, Causes, and Effects. Retrieved from https://www.thebalance.com/what-is-economic-growth-3306014
  3. Brogan, H. (2020). Government. Retrieved from https://www.britannica.com/topic/government
  4. Bryan, M.F. (1997). On the Origin and Evolution of the Word Inflation. Federal Reserve Bank of Cleveland, Economic Commentary, 10.15.1997.
  5. Cetin, et al. (2015). Financial Development and Energy Consumption in Turkey: Empirical Evidence from Cointegration and Causality Tests. Handbook of Research on Behavioral Finance and Investment Strategies: Decision Making in the Financial Industry, 18, 297-314. doi: 10.4018/978-1-4666-7484-4.ch018
  6. Chen, J. (2020). Investment. Retrieved from https://www.investopedia.com/terms/i/investment.asp
  7. Chen, J. (2020). Liquidity. Retrieved from https://www.investopedia.com/terms/l/liquidity.asp
  8. Chien, M.S., Cheng, C.Y. & Kurniawati, M.A. (2020). The non-linear relationship between ICT diffusion and financial development. Telecommunications Policy. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0308596120301154
  9. Eryigit, K.Y. & Eryigit, S.B. (2015). Foreign Direct Investment, Financial Development and Economic Growth: The Case of Turkey. Handbook of Research on Strategic Developments and Regulatory Practice in Global Finance, 21, 331-348. doi: 10.4018/978-1-4666-7288-8.ch021
  10. Eryigit, S.B. & Dulgeroglu, E. (2015). How to Measure the Level of Financial Development.Handbook of Research on Strategic Developments and Regulatory Practice in Global Finance, 17, 260-286. doi: 10.4018/978-1-4666-7288-8.ch017
  11. Eryilmaz, et al. (2015). Financial Development and Economic Growth: Panel Data Analysis. Handbook of Research on Strategic Developments and Regulatory Practice in Global Finance, 15, 233-245. doi: 10.4018/978-1-4666-7288-8.ch015
  12. Fernando, J. (2020). Inflation. Retrieved from https://www.investopedia.com/terms/i/inflation.asp
  13. Hammill, R. (2020). Domestic Credit. Retrieved from https://www.businesspundit.com/encyclopedia/economics/domestic-credit/
  14. Hayes, A. (2020). Trade. Retrieved from https://www.investopedia.com/terms/t/trade.asp
  15. Index Mundi (2019). Domestic credit to private sector (% of GDP). Retrieved from https://www.indexmundi.com/facts/indicators/FS.AST.PRVT.GD.ZS
  16. Index Mundi (2019). Individuals using the Internet (% of population). Retrieved from https://www.indexmundi.com/facts/indicators/IT.NET.USER.ZS
  17. Index Mundi (2019). Mobile cellular subscriptions (per 100 people). Retrieved from https://www.indexmundi.com/facts/indicators/IT.CEL.SETS.P2
  18. Owusu-Agyei et al. (2020). Internet adoption and financial development in sub-Saharan Africa.Technological Forecasting & Social Change. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0040162520311197
  19. Riadi, M. (2020). Inovasi (Pengertian, Ciri, Jenis, Komponen dan Proses). Retrieved from https://www.kajianpustaka.com/2020/07/inovasi-pengertian-ciri-jenis-komponen-dan-proses.html
  20. Undang-undang No.18 Tahun 2002 tentang Sistem Nasional Penelitian, Pengembangan, dan Penerapan Ilmu Pengetahuan dan Teknologi (LN. 2002/ No. 84, TLN NO. 4219, LL SETNEG: 14 HLM).
  21. Yurktur, A.K. (2019). The Relationship Between Financial Development, Innovation and Economic Growth. Handbook of Research on Managerial Thinking in Global Business Economics, 26, 426-479. doi: 10.4018/978-1-5225-7180-3.ch026
  22. Zhu, X., Asimakopoulos, S. & Kim, J. (2020). Financial development and innovation-led growth: Is too much finance better?Journal of International Money and Finance. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0261560618307587