Bullion business and regional welfare: An empirical analysis
DOI:
https://doi.org/10.61511/srsd.v3i1.2026.3336Keywords:
bullion business, regional welfare, West JavaAbstract
Background: The development of bullion business and its increasing digitalization are widely promoted as instruments for financial inclusion and regional welfare enhancement, yet empirical evidence on their actual welfare effects remains limited and spatially heterogeneous. This study aims to examine whether bullion business development, particularly through digital access, contributes to regional welfare in West Java and to identify the conditions under which such development strengthens resilience without generating new systemic risks. Building on theories of asset-based welfare, financial resilience, and digital finance adoption. Methods: The research employs a mixed quantitative approach combining macro-financial indicators, provincial and municipal welfare data, and household-level survey evidence. The analysis utilizes monthly national gold price data, inflation, interest rates, exchange rates, provincial economic indicators, and a structured survey of respondents representing all 27 regencies and municipalities in West Java, complemented by spatial clustering and scenario-based stress testing. Findings: The findings indicate that gold ownership functions primarily as a risk-mitigation asset rather than a growth driver, with welfare effects becoming more pronounced during inflationary and income-shock periods. Physical gold holders demonstrate higher crisis utilization rates than digital users, reflecting stronger behavioral resilience despite lower liquidity. Digital bullion access improves transaction efficiency and inclusion in regions with high digital readiness but amplifies volatility transmission and welfare reversals under stress scenarios, particularly in urbanized areas. Spatial analysis reveals uneven welfare outcomes, where digitally advanced municipalities benefit during price appreciation phases yet face sharper contractions during crises, while low digital readiness regions display greater stability through reliance on physical bullion. Conclusion: The study concludes that bullion digitalization contributes to regional welfare only under conditional designs incorporating hybrid access, spatial differentiation, and crisis-mode governance. Novelty/Originality of this article: The originality of this article lies in empirically positioning bullion access as a spatial welfare variable and demonstrating that digital efficiency does not automatically translate into systemic resilience.
References
AbdulKareem, A.K., & Oladimeji, K.A. (2024). Cultivating the Digital Citizen: Trust, Digital Literacy and E-Government Adoption. Transforming Government: People, Process and Policy, 18(2), 270–276. https://doi.org/10.1108/TG-11-2023-0196
Abdul-Rahim, R., Bohari, S. A., Aman, A., & Awang, Z. (2022). Benefit–Risk Perceptions of FinTech Adoption for Sustainability from Bank Consumers’ Perspective: The Moderating Role of Fear of COVID-19. Sustainability, 14, 1-24. https://doi.org/10.3390/su14148357
Ahmad, M., & Wilkins, S. (2025). Purposive Sampling in Qualitative Research: A Framework for the Entire Journey. Quality & Quantity, 59, 1461–1479. https://doi.org/10.1007/s11135-024-02022-5
Aprizal, S., & Harahap, M.N. (2025). Determinants of Gold Prices in Indonesia Period of 2018-2022. Jurnal Ilmu Manajemen dan Ekonomika, 17(2), 185-202. https://doi.org/10.35384/jime.v17i2.770
Bala, H. (2025). Economic Diversification in the GCC: Does Gold Price Influence The Nexus Between Oil, Green Energy, Innovation, Tourism, And Economic Growth? Future Business Journal, 11, 1-24. https://doi.org/10.1186/s43093-025-00690-9
Barbieri, P. N., Lusignani, G., Prosperi, L., & Zicchino, L. (2022). Model-Based Approach for Scenario Design: Stress Test Severity and Banks’ Resiliency. Quantitative Finance, 22(10), 1927–1954. https://doi.org/10.1080/14697688.2022.2090420
Beckert, J. (2022). Durable Wealth: Institutions, Mechanisms, and Practices of Wealth Perpetuation. Annual Review Sociology, 48, 233-255. https://doi.org/10.1146/annurev-soc-030320-115024
Binh, N. T. T. (2024). Comparative Analysis of Gold, Art, and Wheat as Inflation Hedges. Journal of Risk and Financial Management, 17(7), 1-24. https://doi.org/10.3390/jrfm17070270
Bufe, S., Roll, S., Kondratjeva, O., Skees, S., & Grinstein-Weiss, M. (2022). Financial Shocks and Financial Well-Being: What Builds Resiliency in Lower-Income Households?. Social Indicators Research, 161, 379–407. https://doi.org/10.1007/s11205-021-02727-y
Capoani, L., Fantinelli, M., & Giordano, L. (2025), The Concept of Resilience in Economics: A Comprehensive Analysis and Systematic Review of Economic Literature. Continuity & Resilience Review, 7(2), 121–145, doi: https://doi.org/10.1108/CRR-11-2024-0045
Chai, J., Zhao, C., Hu, Y., & Zhang, Z. G. (2021). Structural Analysis and Forecast of Gold Price Returns. Journal of Management Science and Engineering, 6(2), 135–145. https://doi.org/10.1016/j.jmse.2021.02.011
Coelho J.A., Duarte, A.P., & Sol, M.F. (2025). Volatility in Focus: Comparing Cryptocurrencies, Fiat Currencies from High-Inflation Economies, and Gold. Studies in Economics and Finance. https://doi.org/10.1108/SEF-01-2025-0005
de Leon, E., Makhortykh, M., Gil-Lopez, T., Urman, A., & Adam, S. (2022). News, Threats, and Trust: How COVID-19 News Shaped Political Trust, and How Threat Perceptions Conditioned This Relationship. The International Journal of Press/Politics, 27(4), 952-974. https://doi.org/10.1177/19401612221087179
del Carpio, X., Cuesta, J. A., Kugler, M. D., Hernández, G., & Piraquive, G. (2022). What Effects Could Global Value Chain and Digital Infrastructure Development Policies Have on Poverty and Inequality after COVID-19? Journal of Risk and Financial Management, 15(2), 1-29. https://doi.org/10.3390/jrfm15020043
Dennison, J., & Turnbull-Dugarte, S.J. (2022). Populist Attitudes and Threat Perceptions of Global Transformations and Governance: Experimental Evidence from India and the United Kingdom. Political Psychology, 43(5), 873-892. https://doi.org/10.1111/pops.12717
Harriss-White, B. (2024). Gold, Its Quiddity, and India’s Social Development. Social Change, 54(3), 319-350. https://doi.org/10.1177/00490857241256734
Holl, A., & Rama, R. (2023). Spatial Patterns and Drivers of SME Digitalisation. Journal of the Knowledge Economy. 15, 5625-5649. https://doi.org/10.1007/s13132-023-01257-1
Hossan, D., Dato’ Mansor, Z., & Jaharuddin, N. S. (2023). Research Population and Sampling in Quantitative Study. International Journal of Business and Technopreneurship, 13(3), 209–222. https://doi.org/10.58915/ijbt.v13i3.263
James, J. (2020). The Smart Feature Phone Revolution in Developing Countries: Bringing the Internet to the Bottom of the Pyramid. The Information Society, 36(4), 226–235. https://doi.org/10.1080/01972243.2020.1761497
Katnic, I., Katnic, M., Orlandic, M., Radunovic, M., & Mugosa, I. (2024). Understanding the Role of Financial Literacy in Enhancing Economic Stability and Resilience in Montenegro: A Data-Driven Approach. Sustainability, 16, 1-25. https://doi.org/10.3390/su162411065
Luo, J., & Li, Bz. Impact of Digital Financial Inclusion on Consumption Inequality in China. Social Indicator Research, 163, 529–553. https://doi.org/10.1007/s11205-022-02909-6
Naddiya, I. (2023). The History of Gold Money, Money, and Its Relevancy. Al-Risalah: Journal of Islamic Revealed Knowledge and Human Sciences, 7(1), 439-460. https://doi.org/10.31436/alrisalah.v7i1.438
Nazemi, A., Baumann, F., Schienle, M., & Fabozzi, F.J. (2024). High-Dimensional Macroeconomic Stress Testing Of Corporate Recovery Rate. Quantitative Finance, 24(11), 1669–1678. https://doi.org/10.1080/14697688.2024.2414758
Rado, I., & Nuchpiam, P. (2024). Scaling for Social Impact: Understanding Social Innovation Through Local Empowerment Strategies. Social Enterprise Journal, 20(1), 54–75, doi: https://doi.org/10.1108/SEJ-04-2023-0045
Rêgo, B. S., Jayantilal, S., Ferreira, J. J., & Carayannis, E. G. (2021). Digital Transformation and Strategic Management: A Systematic Review of the Literature. Journal of the Knowledge Economy, 13, 3195-3222. https://doi.org/10.1007/s13132-021-00853-3
Sahadudheen, I., & Kumar, P.K.S. (2025). The Volatility Spillover Between Global Crude Oil and Gold Market: Evidence from Wavelet Coherence and Cross-Power Spectrum Models. Computational Economics, 66, 3063-3080. https://doi.org/10.1007/s10614-024-10819-7
Singh, S., Singh, M., & Attri, S. (2026). Dynamic Volatily Linkages Among Crude Oil, Exchange Rate, Interest Rate, Gold, and Equity Markets: An Empirical Asian Perspective. Managerial Finance, 52(1), 160-182. https://doi.org/10.1108/MF-01-2025-0016
Susai, M. I., & Daniel, L. (2024). Gold Smuggling in India and Its Effect on the Bullion Industry.
Journal of Risk and Financial Management, 17(3), 1-19. https://doi.org/10.3390/jrfm17030122
Trippl, M., Fastenrath, S., & Isaksen, A. (2023). Rethinking Regional Economic Resilience: Preconditions and Processes Shaping Transformative Resilience. European Urban and Regional Studies, 31(2), 101-115. https://doi.org/10.1177/09697764231172326
Qian, Y., Yan, L., & Huang, W. (2025). How Does Digital Inclusive Finance Affect Household Financial Vulnerability? Emerging Markets Finance and Trade, 61(5), 1293–1314. https://doi.org/10.1080/1540496X.2024.2409291
Yeniley, U. (2025). The Role of Gold ETFs in Market Stability, Price Discovery, and Economic Dynamics during Crises. Asian Journal of Economics, Business, and Accounting, 25(1), 60-74. https://doi.org/10.9734/ajeba/2025/v25i11633
Published
Issue
Section
Citation Check
License
Copyright (c) 2026 Kristianus Jimy Pratama
This work is licensed under a Creative Commons Attribution 4.0 International License.
