Neksus Kemiskinan dan Pembangunan Keuangan: Pendekatan Hipotesis Trickle-Down di ASEAN-5

Abstract

Poverty persists as a significant challenge in the ASEAN-5 nations, specifically in Indonesia, Malaysia, Thailand, the Philippines, and Vietnam. In this context, financial development and economic growth are considered the primary solutions through the trickle-down hypothesis, stating that a well-functioning financial system will alleviate poverty by stimulating economic growth. This research aims to test the trickle-down hypothesis in the ASEAN-5 during the period 2000-2022 using the Ordinary Least Square analysis tool. The study employs two standard proxies for financial development: domestic credit to the private sector by banks as a percentage of GDP and M2 as a percentage of GDP; the percentage change in real GDP per capita to measure economic growth; and the standard proxy for poverty alleviation: the poverty headcount ratio. The research finds strong support for the trickle-down hypothesis at the national level. This implies that financial development leads to economic growth, which, in turn, results in poverty reduction in the ASEAN-5 at the national level. This has important policy implications.