Less banking competition in Indonesia leads to lower SME performance.
The study looked at how the structure of the banking market in Indonesia affects the productivity of small and medium businesses. By analyzing data from over 91,000 firms, the researchers found that when there is more competition among banks, small and medium enterprises perform better. In other words, when there are fewer banks competing, these businesses don't do as well. This suggests that a more competitive banking industry can lead to improved performance for small and medium enterprises in Indonesia.