How Significant was the Global Financial Crisis to Indonesia’s Public Listed Housing Developers?
The tenth year anniversary of the Global Financial Crisis (GFC) provides an opportune moment to reflect on its true devastation on national industries. While many economists regard it as a global watershed, Indonesia was among the isolated few that emerged relatively unscathed. However it would be erroneous to assume that all of its economic sectors enjoyed the same fortune. A study was conducted to determine the most significant economic event for Indonesia’s public listed housing developers in the years leading up to, and after the GFC. Panel data regression analysis was conducted on the financial data of the sampled companies. The analysis shows that the GFC of 2008 was not the most significant event for the study period for housing market players, nor was it the previous year when housing investor confidence was shaken. Instead that accolade goes to the event of 2012. While public-listed non-financial companies were affected by the Eurozone Crisis that year, a combination of factors resulted in public-listed housing developers enjoying record financial performance. The study underscores the importance of conducting deep sectoral analysis before arriving at any conclusions regarding the impact of external shocks on particular economic sectors.
Asian Development Bank. (2013). Asian development outlook 2013. Asia’s energy challenge. Mandluyong City, Philippines: ADB.
Bank Indonesia. (2009). 2008 Economic report on Indonesia. Jakarta.
Bank Indonesia. (2010). 2009 Economic report on Indonesia. Jakarta.
Bank Indonesia. (2011). 2010 Economic report on Indonesia. Jakarta.
Bank Indonesia. (2012). Financial stability review, No 19. September, Jakarta.
Bank Indonesia. (2013a). 2012 Economic report on Indonesia. Jakarta.
Bank Indonesia. (2013b). Financial stability Review, No 20. March. Jakarta
Bank Indonesia. (2013c). Residential property price survey Quarter IV – 2012. Jakarta
Basri, M.C., & Rahardja, S. (2010). The Indonesian economy amidst the Global Crisis: Good policy and good luck. ASEAN Economic Bulletin 27(1), 77-97.
Croux, C., Dhaene, G. & Hoorelbeke, D. (2003) Robust standard errors for robust estimators (Discussion Paper Series (DPS) 03.16). Dec Faculty of Economics and Applied Economics, Leuven, Belgium:
Katholieke Universiteit/ Retrieved from http://www.econ.kuleuven.be/ces/discussionpapers/default.htm
Dermawan, D. & Setyoningsih, T. (2012). Indonesia’s residential property price index. Paper presented at the 31st CIRECT Conference on Economc Tendency Surveys and Economic Policy, Sept 5-8, Vienna, Austria. Retrieved from https://www.ciret.org/media/ciret_papers/vienna-2012/p_132-710790.pdf.
Forrest, R. & Yip, N.M., eds. (2011). Housing markets and the Global Financial Crisis: The uneven impact on households. Cheltenham, Glos.: Edward Elgar Publishing Ltd.
Goh, J., Adiningsih, S. & Gochoco-Bautista, M.S. (2011). Lessons from the Financial Crisis: Report of the Asian Financial Regulatory Committee. In The World in crisis: Insights from six shadow financial regulatory committees from around the world, edited by R. Litan, 61-124. Philadelphia, USA: FIC Press.
Ismal, R. (2013). Islamic banking in Indonesia: New perspectives on monetary and financial issues. Singapore: John Wiley and Sons.
Isnawangsih, A., Klyuev, V. & Zhang, L. (2013). The big split: Why did output trajectories in the ASEAN-4 diverge after the Global Financial Crisis? (IMF Working Paper 13/222). Washington: IMF.
Kim, K.H. (2008). Housing and the Korean economy. Journal of Housing Economics, 13(4), 321-341.
Lin, J. Y. & Treichel, V. (2012). The Unexpected Global Financial Crisis: Researching its Root Cause (Policy Research Working Paper 5937).Washington: The World Bank.
Milunovich, G. & Truck, S. (2013). Regional and global contagion in real estate investment trusts: The case of the Financial Crisis of 2007-2009. Journal of Property Investment & Finance, 31(3), 53-77.
Murphy, L. (2011). The Global Financial Crisis and the Australian and New Zealand housing markets. Journal of Housing and the Built Environment, 26(3), 335-351.
Organisation for Economic Co-operative and Development. (2012). OECD Economic Surveys. Indonesia, September, Paris.
Rana, P.B. & Blomenhofer, M. (2013). The Eurozone and its impact on Asia (RSIS Working Paper No 254, Feb.) Singapore: Nanyang Technological University.
Tambunan, T.T.H. (2010). The Indonesian experience with two big economic crises. Modern Economy, 1, 156-167.
Thee, K.W. (2012). The Indonesian economy after the Global Financial Crisis. Retrieved from https://crawford.anu.edu.au/acde/ip/pdf/lpem/2012/2012_10_24_-_SEADI_Thee_Kian_Wie.pdf.
Titiheruw, I.S., Soesastro, H. & Atje, R. (2009). Global Financial Crisis Discussion Series Paper 6: Indonesia. London: Overseas Development Institute.
Wilczyński, R. (2011). Global financial governance: A perspective from the International Monetary Fund. Contemporary Economics, 5(1), 4-16.
Whitehead, C. & Williams, P. (2011). Causes and consequences? Exploring the shape and direction of the housing system in the UK post the financial crisis. Journal of Housing Studies, 26(7-8), 1157-1169.
World Bank. (2017). World development indicators database. Retrieved at 17 April from databank.worldbank.org/data/download/GDP.pdf. Accessed on 11 December 2017