Jurnal Akuntansi dan Keuangan
Vol 10, No 1 (2022): Maret 2022

Financial Market Development on Economic Growth in Indonesia Using Principal Component Regression Analysis

Yunus, M (Unknown)
Setiawan, Budi (Unknown)
Bhagat, Priya Rani (Unknown)
Saleem, Adil (Unknown)

Article Info

Publish Date
28 Feb 2022


This study investigates the relationship between macroeconomic variables and financial market development on economic growth in Indonesia using principal component analysis. A quantitative data was collected from World Bank dataset from 2002 to 2019. Data were analysed using statistical software R. Findings reveal principal component analysis is better than multiple linear regression in explaining the correlation among independent and dependent variables. This study also reveals stock traded of total value as percentage of GDP has the biggest effect on the performance on Indonesian economy during research period. In contrast, unemployment has the smallest impact on economic growth in Indonesia. The results assist in understanding the importance of macroeconomic variables and financial market development on the performance of Indonesian economy.

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Journal Info





Economics, Econometrics & Finance Education Environmental Science Social Sciences Other


urnal Akuntansi dan Keuangan P-ISSN 2301-4717 E-ISSN 2716-022X is a open-access, peer-reviewed scientific journal published online through an Open Journal System. This journal is published by the Department of Accounting Faculty of Economics and Business, Malikussaleh University, Aceh Utara, ...