The contribution banking industry to economy growth / Wan Nur Izana Wan Mohd Zawawi

The banking industry is one of the most important institutions that may impact the functioning of the economy. Commercial banks are big financial institutions that regulate and manage the money supply in order to minimize risks. The purpose of this study is to determine the contribution of the banking industry to economic growth using selected variables. The research is performed using Gross Domestic Product (GDP) as dependent variable to examine the relationship between Bank loans, Net Interest Margin (N 1M) and Bank Deposits (BD) as an independent variable. Information for this analysis were collected from the sampled companies' related databases and annual reports. This study uses secondary data from the top three (3) commercial banks listed in Bursa Malaysia between the years 2006 to 2020. So, the total observation for this study is 45. Furthermore, the results of this study are focused on descriptive analysis, correlation analysis, regression analysis, multicollinearity test and normality test. The balanced panel data is regressed using the Pooled Ordinary Least Square Model. The study show only bank loans have a contribution on economy growth.
Keywords: Bank loans, Net Interest Margin, Bank Deposits, Gross Domestic Product (GDP) and Commercial Banks