The Impact of Zakah, Islamic Financing, Sukuk and Inflation on National Economic Growth with Poverty as a Moderation Variable

Ridlo, Musalim; Muthohar, Ahmad Mifdlol; Masruhan, Khalim Mudrik

doi:10.22219/jes.v6i1.14993

Cited by 10 publications

(17 citation statements)

References 23 publications

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“…Using generalized method of moments analysis, the researchers found that macroeconomic stability, particularly GDP per capita, had a significant influence on the development of Sukuk, thereby supporting the demand-following hypothesis. In contrast, Marsi and Wardani (2020) and Ridlo et al (2021) confirmed that Sukuk is an insignificant factor in influencing Indonesian's economic growth. Thus, they certainly verified neutrality hypothesis.…”

Section: Islamic Bond and Economic Growthmentioning

confidence: 85%

Islamic financial development & economic growth: the emergence of Islamic financial market in Pakistan

Naz

Gulzar

2023

JIABR

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Purpose The impact of Islamic finance on economic growth is an ongoing debate. The purpose of this study is to empirically evaluate how the development of Islamic finance affects the long- and short-run economic growth of Pakistan. Design/methodology/approach The institutional variables, Islamic banking development (IBD), Islamic bond market development (IBM) and Islamic stock market development (ISM), are considered as measures of Islamic financial development, and real gross domestic product (GDP) is taken as measurement proxy of economic growth. The quarter time series data from Q1:2006 to Q4:2021 is analyzed through Autoregressive distributed lag model, Bounds test, ECM and Pairwise granger causality test. Findings The findings of this study indicate that in the long run, there is a significant and positive correlation between IBD and ISM with the real GDP, though ISM negatively cointegrated with real GDP in the short run. In contrast, IBM and real GDP did not find cointegrated in the long run, though the relationship is significant but negative in the short run. Practical implications The findings highlight Islamic financial development in Pakistan can contribute to the country's economic development, and this can be achieved by improving the infrastructure, increasing skilled professionals, creating a favorable legal environment and ensuring financial sector stability. Investors can diversify their investments and mitigate risk by adding Islamic financial instruments to their portfolios. Originality/value This pioneering study simultaneously measures the cause and effect relationship between Islamic financial development indicators (Islamic banking, Islamic bond and Islamic stock) and economic growth in Pakistan.

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Section: Islamic Bond and Economic Growthmentioning

confidence: 85%

Islamic financial development & economic growth: the emergence of Islamic financial market in Pakistan

Naz

Gulzar

2023

JIABR

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“…With the distribution of the ZIS funds, the Muslim community who cannot afford it can still meet their needs so that consumption activity which is an indicator of economic growth, continues (Jedidia & Guerbouj, 2020). ZIS encourages the consumption of poor Muslim communities and creates income equality (Ridlo et al, 2021). Besides that, according to (Alghina et al, 2019), ZIS can also be distributed as business capital to MSME actors through BAZNAS.…”

Section: Discussionmentioning

confidence: 99%

“…Previous research regarding the influence of Islamic social finance, such as ZIS on economic growth has been developed in many countries, such as Pakistan (Azam et al, 2014), Malaysia (Khasandy & Badrudin, 2019), eight selected Muslim countries (Jedidia & Guerbouj, 2020), and Indonesia (Alghina et al, 2019;Arwani & Wahdati, 2020;Athoillah, 2018;Munfaati & Noviarita, 2023;Putriani et al, 2020;Ridlo & Wardani, 2020;Ridlo et al, 2021;Ridwan & Pimada, 2019;Suhendar et al, 2022;Supratman & Asih, 2022;Suprayitno, 2020;Triyawan et al, 2022;Wardani & Al Arif, 2021). Most studies find that Islamic social financial instruments (e.g ZIS) have a positive and significant effect on economic growth, but on the other hand, Islamic social finance has no significant effect (Munfaati & Noviarita, 2023;Ridlo & Wardani, 2020).…”

Section: Islamic Social Finance and Economic Growthmentioning

confidence: 99%

“…Considering the potential of Islamic social finance funds (e.g ZIS), which can contribute to the country's economy, previous research has proven this empirically. Most studies focus on Muslim-majority countries such as Pakistan (Azam et al, 2014), Malaysia (Khasandy & Badrudin, 2019), eight selected Muslim countries (Jedidia & Guerbouj, 2020), and Indonesia (Alghina et al, 2019;Arwani & Wahdati, 2020;Athoillah, 2018;Munfaati & Noviarita, 2023;Putriani et al, 2020;Ridlo & Wardani, 2020;Ridlo et al, 2021;Ridwan & Pimada, 2019;Suhendar et al, 2022;Supratman & Asih, 2022;Suprayitno, 2020;Triyawan et al, 2022;Wardani & Al Arif, 2021). Although research on the contribution of ZIS on GDP growth continues to grow, most studies use panel data with limited period research.…”

Section: Introductionmentioning

confidence: 99%

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The contribution of Islamic social finance to economic growth in Indonesia

Siswantoro

Ikhwan

2023

RISFE

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Purpose – This study aims to identify the contribution of Islamic social finance (Zakat, Infaq, and Shadaqah or ZIS) to economic growth in Indonesia, both in the long-term and short-term models. Based on previous studies, government expenditure; investment; and trade openness are also included in the model as control variables.Methodology – Annual time series data for 21 years from 2002 to 2022 were analyzed using the Error Correction Model (ECM) approach to determine the long-term and short-term effects of independent variables on economic growth.Findings – The main findings of this study confirm that Islamic social finance (ZIS) is a financial instrument that benefits the economy. ZIS can be an alternative fund for overcoming various problems of the Muslim Ummah and revitalizing the economy, even more so in a country with a majority Muslim population like Indonesia where ZIS instruments such as Zakat are obligatory to be issued to able-bodied Muslims. The study results show that the effect of ZIS on economic growth in Indonesia is felt in the long term, while in the short term, it has no significant impact.Implication – This research provides insight for related parties (especially National Board of Zakat/Badan Amil Zakat Nasional, BAZNAS) further to optimize the potential of ZIS into productive sectors to improve the economy.Originality – Most previous studies used panel data with a limited period to estimate the effect of Islamic social finance on economic growth, while this research utilized time series data with the ECM approach for a longer period.

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“…This research confirms Ledhem (2020) and Smaoui and Nechi (2017) who state that the development of Sukuk does not significantly affect economic growth. However, in contrast to Ridlo et al (2021) and Tan and Shafi (2021), the difference in results is most likely because the data used in the two studies only covers corporate Sukuk, while in this study a combination of corporate and state Sukuk is used. Sukuk is a source of funding for businesses looking to boost marketing, innovation, and productivity.…”

Section: Effect Of Sukuk Growth On Indonesia's Economic Growth In The...mentioning

confidence: 99%

Islamic Finance-Growth Nexus: Evidence from Indonesia

Bella

Mawardi²,

Amelia³

2022

Shirkah

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Previous work on the financial industry, which covers the entire financial services sector and is related to economic growth, has remained limited. This present study empirically analyzed the growth of Indonesia’s three main sectors of the Islamic Financial Industry (Islamic Capital Market, Islamic Banking, and Islamic non-bank Financial Industry) towards economic growth between 2014Q1 and 2021Q3. The quarterly data was processed through the ARDL Bound-test for cointegration and Error Correction Model (ECM). The research revealed three of the four research variables (sharia stock, Sukuk, and sharia insurance) that significantly affect GDP, while Islamic banking shows no significant effect on GDP. As a result, Indonesian Islamic banks must optimize funds for the productive sector. Future policies should consider maximizing the role of the Islamic financial industry to accelerate economic growth.

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The Impact of Zakah, Islamic Financing, Sukuk and Inflation on National Economic Growth with Poverty as a Moderation Variable

Cited by 10 publications

References 23 publications

Islamic financial development & economic growth: the emergence of Islamic financial market in Pakistan

Islamic financial development & economic growth: the emergence of Islamic financial market in Pakistan

The contribution of Islamic social finance to economic growth in Indonesia

Islamic Finance-Growth Nexus: Evidence from Indonesia

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