The Muslim Business and Economics Review (MBER) is an open access and double blinded peer-reviewed journal published by UIII Press, managed by the Faculty of Economics and Business, Universitas Islam Internasional Indonesia. MBER bridges the gap between theory and practice, exploring how Islamic economic principles can contribute to real-world solutions for economic challenges in Muslim societies. The journal emphasizes research falling in applied economics—empirical studies and results-focused case studies—on Islamic economics, or the intersection between economics, development, and area studies in Muslim societies, including Islamic economics, digital economy, political economy, trends and opportunities in Islamic finance, Islamic banking and financial markets, Islamic social finance (ZISWAF), governance, circular economy, Sustainable Development Goals (SGDs), halal and creative industry. Submissions undergo a blind review. MBER has become a CrossRef member since year 2022. Therefore, all articles published by MBER will have unique DOI number. P-ISSN: 2829-2499 E-ISSN: 2962-6471
Universitas Islam Internasional Indonesia
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Hybrid Financial Innovation: A Sustainable Economic Recovery Model for OIC Nations
ABSTRACT Global financial shocks, such as COVID-19 and other systematic vulnerabilities, dramatically threaten the world's economic resilience. These recessional events have revealed economic weakness, especially in OIC and other developing nations. resulting in a massive amount of job losses, disturbance in manufacturing, fiscal imbalances, recessions, and deflationary issues. Existing economic recovery strategies fail to ensure long-term financial sustainability and equitable development. This study examines a comprehensive framework to disclose a resilient economic recovery model that mitigates shocks and leads to sustainability in OIC countries. This study proposes a hybrid financial innovation model that ascertains government-backed crisis funds with Islamic financing mechanisms. Which can ensure sustainable agricultural funding and promote long-term economic resilience. It will save a shocked economy from recessions by its model mechanism. Observing Pakistan, Indonesia, Saudi Arabia, Turkey, Bangladesh, Egypt, Iran, and Malaysia, this finding acknowledged why fund liquidity is the origin of origins. This qualitative research approach will combine sustainable economic modeling and a consistent funding framework which adaptable to OIC nations. These findings will work as a practical roadmap for policymakers, ensuring that agricultural financing remains stable during economic shocks and recessional periods by the support of universal financial strategies. Additionally, this research offers a model that contributes to long-term resilience and economic stability. The findings provide policymakers with a definitive framework for alleviating future crises, guaranteeing fiscal sustainability, and enabling OIC states to convert economic weaknesses into strategic advantages. Keywords: Hybrid financial model, sustainable funding, Islamic Finance, OIC Nations, Universal Shock Fund.
Halal Fashion E-Commerce: Driving Social Inclusion in Peureulak
This study investigated the effectiveness of e-commerce in boosting halal fashion sales in Peureulak, Aceh, Indonesia, exploring its potential to enhance economic opportunities in the region. Employing a qualitative field research approach, data was gathered through interviews with key informants, including owners, employees, and buyers of halal fashion businesses in Peureulak. The research examined online strategies and their impact on sales. The findings revealed that e-commerce significantly increased halal fashion sales in Peureulak by expanding market reach beyond local boundaries and facilitating effective promotion and clear product information dissemination. Key success factors included ease of online access, high-quality product presentation, competitive pricing, trustworthy customer service, diverse payment options like Cash on Delivery (COD), and positive customer reviews. While local sales remained primarily conventional, e-commerce successfully attracted external customers, substantially supporting business growth. The study suggests that optimizing digital platforms like TikTok, Shoppe, and Instagram, alongside prioritizing rapid customer service, attractive promotions, and reliable product quality, are crucial strategies for enhancing e-commerce effectiveness in the halal fashion sector. These findings highlight the potential of e-commerce to drive economic growth and broader social inclusion within similar contexts in OIC countries by leveraging local strengths and expanding market access.
State Religion and Corruption in Islamic Countries: An Empirical Examination
Corruption remains pervasive in many Islamic countries, despite the ethical values and integrity often associated with religious norms. This study investigates the state religion's impact on corruption levels in member countries of the Organisation of Islamic Cooperation (OIC). Utilizing cross-sectional data from 53 OIC countries and employing the Ordinary Least Squares (OLS) regression method, the study finds that the percentage of the Muslim population has a negative but statistically weak effect on the Corruption Perceptions Index (CPI). Conversely, the adoption of Islam as a state religion significantly increases corruption, suggesting that religious institutionalization may undermine governance quality. These results challenge prior assumptions that religiosity inherently reduces corruption. Instead, the study highlights that institutional framework, rather than religious adherence, shape governance outcomes. The findings underscore the need for anti-corruption efforts in Islamic countries to prioritize institutional reforms and economic policies that enhance transparency and accountability, rather than relying solely on religious values. Keywords: Corruption, Islam, State Religion, OIC
Trump 2.0: Unpacking the Potential Economic Impacts on OIC Economies
Donald Trump's trade policies during his presidency were characterized by protectionist measures, including tariff increases and trade disputes with major economies. Following his re-election, similar policies could resurface, impacting global trade dynamics. This paper aims to analyze the potential economic consequences of Trump's second leadership on OIC (Organization of Islamic Cooperation) economies, focusing on three key policies: (1) a tariff on steel and aluminum, (2) a trade war with China, and (3) geopolitical tensions with BRICS nations. The GTAP (Global Trade Analysis Project) model is employed to simulate the short-run effects of these policies on GDP, trade balance, and welfare in OIC countries. The results suggest that increased tariffs and trade conflicts may lead to shifts in global trade patterns, with potential negative spillover effects on OIC economies, particularly those with strong trade ties to the US, China, and BRICS. Trade diversion effects are also observed, indicating possible shifts in export flows. The findings provide insights into how OIC nations might navigate the uncertainties of a renewed Trump administration's economic policies. Keywords: Donald Trump, OIC economies, Tariff, GTAP.
ESG on Stability and Bank Performance: The Moderating Role of Diversity and Inclusion in OIC Countries
This study analyses the impact of environmental, social and governance (ESG) performance on the stability and performance of Islamic banks, considering the moderating role of diversity and inclusion. Using panel data from 60 Islamic banks in 11 Organisation of Islamic Cooperation (OIC) countries during the period 2014-2023, the research finds that ESG performance positively affects the stability and performance of Islamic banks, confirming the role of sustainability in enhancing the financial resilience of the Islamic banking sector. However, this study also finds that diversity and inclusion weakens the positive impact of ESG performance on the stability and performance of Islamic banks. Additional analysis shows that these results are consistent only in the environmental and social pillars. These findings highlight the importance of managing diversity and inclusion to enhance ESG implementation in Islamic banks. Poorly managed diversity and inclusion efforts may weaken ESG effectiveness, hindering performance and stability. For stakeholders, including investors and regulators, fostering inclusion is essential to support sustainability and long-term stability.
Copyright (c) 2025 Muhammad Irsyad, Fauziah Chairiyati
Islamic Financial Development, Country Risk, and Human Development: Do They Shape Income Inequality in OIC Countries?
Income inequality remains a persistent development issue across member countries of the Organization of Islamic Cooperation (OIC), irrespective of their income level. The Islamic financial system, built upon Shariah principles of fairness, risk-sharing, and ethical finance, offers a viable alternative to conventional systems in addressing inequality. This study investigates the long-run effects of Islamic financial development, human development, and country risk on income inequality in OIC countries and empirically tests the Islamic Financial Kuznets Curve (IFKC) hypothesis. Using balanced panel data from 13 OIC member states over the period 2013–2023, the analysis applies Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) estimators using STATA17. The results confirm that Islamic financial development significantly reduces income inequality and follows a non-linear (inverted U-shaped) relationship, validating the IFKC hypothesis. Human development exhibits a mixed effect: while DOLS and non-linear models suggest an equalizing impact, FMOLS results indicate that early gains may benefit elite groups disproportionately, reflecting institutional asymmetries. Country risk consistently exacerbates inequality across all models. Moreover, interaction effects reveal that institutional quality moderates the relationship between human development, country risk, and inequality. In some cases, even stronger institutions may fail to ensure equity when they lack inclusivity. These findings highlight the importance of aligning Islamic financial expansion with inclusive governance and social development policies. For OIC policymakers, achieving sustainable and inclusive growth requires synergy between financial deepening, human development, and institutional transformation Keywords: Islamic financial development, Income inequality, Human development, Country risk, Islamic Financial Kuznets Curve
ESG Controversies and Bank Risk-taking: Islamic vs Conventional Banks
Environmental, social, and governance (ESG) controversies have gained increasing attention due to their potential financial and reputational risks, particularly within the banking sector. As regulatory pressures and stakeholder expectations escalate, understanding the impact of ESG controversies on banks' risk-taking behavior is critical for financial stability and sustainable banking practices. This study investigates the relationship between ESG controversies and bank risk-taking, comparing Islamic and conventional banks within the Organisation of Islamic Cooperation (OIC) countries. Using a panel dataset covering 35 Islamic banks and 68 conventional banks across 11 OIC countries between 2013 and 2022, we apply a fixed-effects regression model to assess the influence of ESG controversy exposure on bank risk. The results demonstrate that Islamic banks are significantly less exposed to ESG controversies than conventional banks, reflecting the normative ethical underpinnings of Islamic finance. However, Islamic banks exhibit higher risk levels compared to their conventional counterparts. The regression analysis also reveals that, in both the full sample and the conventional bank sub-sample, fewer ESG controversies are significantly associated with lower risk-taking, thereby enhancing bank stability. However, this effect is absent in Islamic banks. These results highlight the critical role of institutional, cultural, and regulatory contexts in shaping how ESG controversies influence bank behavior. While ESG controversies may act as effective risk control signals in conventional banking systems, their impact appears attenuated in Islamic banks, where ethical principles are already embedded in financial practices.
Copyright (c) 2025 Kemala Putri Ayunda, Yunice Karina Tumewang
Two Different Approaches of Estimating Production Factor Demand: Evidence from Indonesian Large and Medium Enterprises
This study measures the elasticity of production factors of manufacturing companies in Indonesia by applying demand model for production inputs. Using survey data of large and medium-sized companies in Indonesia from 1995-2015, this study calculates the elasticity of demand for factors of production through two approaches: first, the transcendental logarithm equations applying unrestricted, homotheticity, and adjustment cost model, and second, a system of equations. We use the variation in the group of industries as a proxy for the market price of inputs. The results show that there is heterogeneity in terms of the magnitude and nature of the cross-price elasticity between production inputs for both complementary and substitute inputs. Meanwhile, the own price elasticity is negative for all production inputs and there are positive effect adjustment costs that must be borne by firms in expanding production inputs.
Cash Waqf and Crowdfunding: A Study of Online-Based Cash Waqf in The Passive Charity of The Indonesian Waqf Education Foundation
This research examines the effectiveness of crowdfunding for online-based cash waqf by analysing the cash waqf turnover practice of the Indonesian Waqf Education Foundation's Pasif Amal (Passive Charity) website. Two topics are explored in this research. First, how the Indonesian Waqf Education Fund practices cash waqf crowdfunding strategies for passive charity. Second, the effectiveness of the cash waqf crowdfunding strategy and the implications for the legalization of cash waqf. This research uses a qualitative method with the approach of Soerjono Soekanto's legal effectiveness. This research concludes through its passive crowdfunding strategy, the Indonesian Waqf Education Foundation has changed the previously-dominant view that waqf is limited to land; instead, the Foundation’s experience illustrates that waqf can also represent goods in the form of money. The findings confirm that passive charitable institutions are effective and can even become a new approach in the world of waqf, especially in countries where cash waqf is already a legal practice.
Copyright (c) 2025 Mochammad Dzul Fahmi, Muhammad Abdul Majid, Fazlullah Ihza Qaseem
Does Halal Certification Matter? The Influence of Polarity in Religious Understanding on Attachment to Halal Certification in Indonesia
This article examines the influence of polarity in religious understanding on attachment to halal certification in Indonesia. In 2024, there were 3,237,167 products that have been certified halal, with 58.5% being self-declared as halal and the remaining 41.5% being regular halal certificates. This number has more than tripled since 2019, when there were just 963,411 halal-certified products. The high increase in the number of halal-certified products is directly proportional to the high halal awareness of Indonesian Muslims. Previous studies have not explicitly addressed the concept of halal as understood by the Indonesian Muslim community, which possesses a diverse range of religious interpretations. This article reveals the typology of Indonesian Muslim religious understanding and its influence on attachment to halal certification. This research used quantitative methods by distributing questionnaires to Indonesian Muslim respondents with conservative, moderate, and progressive religious categorizations. Respondents in this study were aged 18-60 years, and included both men and women. Data were analyzed using the ANOVA technique using SPSS 29.0.1. The results show a significant value (0.008), indicating a difference in attachment to halal certification between conservative, moderate, and progressive groups, with the highest attachment average amongst conservative Muslims (33.46).
Copyright (c) 2025 Arisy Abror Dzukroni, Raharjo Raharjo
The Nexus of Environmental Performance and Economic Growth: A Panel Analysis from Organization of Islamic Cooperation Countries
The climate is changing and the earth is getting hotter. Cutting down rainforests, burning fossil fuels, and farming livestock all contribute to greenhouse gas emissions. Human economy and the natural world are closely connected. This study evaluates the relationship between environmental performance and economic growth using panel data for Asian member states of the Organization of Islamic Cooperation (OIC) for the years 2020 to 2022. Data on Environmental Performance Index and Gross Domestic Product growth were collected from the Yale Center for Environmental Law & Policy and the World Bank. Panel data regression was used by selecting the best parameter estimates from three panel data regression models: Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM). The study findings are anticipated to enhance nations' consciousness regarding environmental concerns and to enhance their focus on ecologically sustainable economic growth and development trajectories.
Copyright (c) 2025 Muhammad Khafidh, Jajang Jajang, Safiullah Junejo
Investigating the CO2 Emissions Convergence and its Nexus with Growth, Renewable Energy, and Energy Intensity in OIC Countries
Carbon dioxide (CO₂) emissions pose a significant climate threat, impacting all aspects of human activity and necessitating global collaboration to protect both human and nonhuman species. Transitioning from fossil fuels to renewable energy and enhancing energy efficiency are widely regarded as the most effective strategies for reducing emissions and mitigating global warming. Against this backdrop, we examine CO₂ emissions convergence among 50 Organization of Islamic Countries (OIC) member states, considering the role of economic growth, renewable energy use, and energy intensity. Our analysis employs stochastic, club, and beta convergence methods, alongside system generalized method of moments (GMM) estimation. Four key findings emerge from this analysis. First, accounting for country heterogeneity and cross-sectional dependence, we confirm stochastic convergence in CO₂ emissions among OIC members. Second, there is evidence of club convergence, where emissions cluster into distinct groups. Third, while renewable energy consumption negatively affects emissions pathway, energy intensity positively and directly affects CO₂ emissions’ growth. However, fourth, economic growth increases carbon emissions. These findings have significant policy implications. If emissions do not converge, allocating emission rights through carbon trading could lead to substantial international wealth transfers, influencing global carbon policy. Additionally, countries with similar convergence patterns could adopt common climate policies. At the same time, all nations should prioritize increasing the share of renewable energy in their energy mix to achieve sustainable emission reductions.
Copyright (c) 2025 Mansur Muhammad, Bello Audu, Sadiq Ibrahim Ahmed
Maqasid al-Shariah and Sustainable Finance: Analyzing the Impact of Green Sukuk Allocation in Indonesia
This research paper examines the application of Maqasid al-Shariah principles in the context of sustainable finance, focusing on the impact of Green Sukuk Allocation in Indonesia. As an Islamic financial instrument, Green Sukuk aims to raise funds for environmentally friendly projects while adhering to shariah principles. This study analyzes the 2023 Green Sukuk Allocation and Impact Report from the Indonesian Ministry of Finance to assess the impact of Green Sukuk in achieving both financial and sustainable development goals. Using a qualitative approach, this paper evaluates how the allocation of green sukuk funds aligns with the objectives of Maqasid al-Shariah, particularly in the preservation of the environment and the promotion of social welfare. The analysis also considers the challenges and opportunities faced in implementing green sukuk as a sustainable financing mechanism. This research finds that the implementation of green sukuk financing in Indonesia aligns with the five essential principles of Maqasid al-Shariah, namely hifz al-deen (preservation of religion), hifz al-nafs (preservation of life), hifz al-aql (preservation of intellect), hifz al-maal (preservation of wealth), and hifz al-nasl (preservation of lineage). Moreover, the implementation of green sukuk financing has also positively impacted multiple sectors in Indonesia. The findings of this study have important implications for policymakers, financial institutions, and investors seeking to promote sustainable development through Islamic finance instruments. The study's insights can inform the design of future green finance policies and strategies, highlighting the role of Islamic finance in achieving both financial and sustainability goals.
Copyright (c) 2025 Muhammad Fakhrul Arrazi
Enhancing Muslim SME Sustainability in Malaysia: The Role of Zakat and Financial Literacy
Financial literacy issues pose significant challenges for small and medium enterprises (SMEs) in Malaysia, leading to improper financial management practices and poor performance. In response to these challenges, this study explores the potential role of zakat, an Islamic fiscal tool, in addressing financial management issues among Muslim SMEs. Specifically, the study analyses how zakat can serve as a mechanism for distributing assistance to poor Muslim entrepreneurs within the SME sector. Motivated by zakat's potential to mitigate financial management and literacy issues, this research employs semi-structured interviews to gather insights from seven Muslim entrepreneurs. Through qualitative analysis, the study examines the perceptions, experiences, and expectations surrounding zakat as a means of financial support tools for SMEs. The findings shed light on how zakat institutions can contribute to enhancing financial literacy and promoting sound financial management practices among Muslim SMEs, including the formulation of a proposed model of Non-Cash Zakat Distribution for Financial Management Services. The implications of this study extend beyond the immediate context. By effectively leveraging zakat funds, policymakers, financial institutions, and zakat administrators can play a proactive role in supporting Muslim SMEs and promoting grassroots economic development.
Copyright (c) 2025 Dasyarini Daud, Zubir Azhar, K. Kishan, Mohd Suffian Mohamed Esa
Gaining Sustainable Performance through Risk Management System: Dealing with Uncertainty in Islamic Insurance Companies
This study investigates how the halal business process sustains company performance by examining the effect of premiums, claims, operating costs, investment income, and risk-based capital on the profitability of Islamic insurance in Indonesia. In particular, the risk management system is key to demonstating how Islamic insurance companies restrain risks to gain profits, considering that the basic concept of Islamic insurance is the risk sharing approach. Moreover, to provide research novelty and originality, the authors expand the research framework to include the interactions of the company's risk management system to test the influence of investment income and risk-based capital on profitability. The overall population comprised all Islamic insurance companies in Indonesia, but samples were restricted to life insurance businesses registered with the Indonesian Islamic Insurance Association for 2018-2022. The authors were left with a sample of 13 companies after using a non-probability approach with a purposive sampling technique. The data was analyzed by STATA 17 on four gradual statistical procedures: Panel Data Regression Analysis, Moderated Regression Analysis, Robustness Test Analysis, and Content Analysis. The results demonstrate that the premiums, claims, and investment income have no significant effect on company profitability. Meanwhile, operational costs and risk-based capital have a significant effect on profitability performance. Furthermore, enterprise risk management successfully acts as a moderating variable. Based on findings, the authors strongly recommend that Islamic insurance companies effectively implement enterprise risk management in dealing with uncertain circumstances for the real business process.
Copyright (c) 2024 Sabila Nur Addini, Izra Berakon, Nor Nabilla Muhammad
Structural and Digital Transformation of the Financial Industry: A Futuristic Approach for Sustainable and Green Digitalization
This study examines the structural and digital transformation within the financial industry, portraying the urging need for green sustainable digitalization within Industry 4.0. This study aims to explore the role of digital technologies, such as artificial intelligence (AI), big data analytics, and the Internet of Things (IoT), in promoting environmental sustainability in the financial sector. The study reviews the existing literature and the identified critical challenges and opportunities in sustainable digital transformation. It proposes pathways for leveraging digitalization to attain socio-environmental sustainability and green finance. Empirical evidence supports such analysis, finding positive impacts that digital finance brings to green technology innovation and carbon neutrality, emphasizing the synergy of digital development with sustainability goals. The study finds that policy and regulation will be critical in smoothing the transition and fostering diverse social and environmental implications of sustainable digital finance. In this context, the study brings a futuristic outlook on the way digital technologies are integrated within corporate strategies to be part of sustainable development.
Copyright (c) 2024 Shah Fahad, Mehmet BULUT
Assessing Fiscal Policy Impact on Economic Growth: A Comparative Analysis of Indonesia and Turkey
The study involves the application of Vector Error Correction Models (VECM) to analyze macroeconomic dimension of fiscal policy on economic growth in Indonesia and Turkey. Furthermore, it attempts to depict the paths of fiscal policy and GDP evolution in the two economies by providing data for the period 1980-2022. It uses Augmented Dickey Fuller (ADF) tests and Johansen co-integration tests to check against the stationarity and the long-run relationships between fiscal policy variables and economic growth. The result of Granger causality analysis was used to address the two-way relationship between these variables. Data discloses that the fiscal policy of Indonesia does not significantly affects economic development directly, as Turkey’s case where government expenditure does have a positive relationship with economic growth in the short term. Despite the common unstable connection between government participation, government revenue and economic growth, there exists a long-term inimical correlation in both countries. The results of the study indicate the impact of fiscal policy as non-immediate measure is not effective with regards to Indonesia economic growth. This calls attention to the role of resource reallocation in creating a lasting development rate. That is why the relationship between public spending and short-term growth shows significant effectiveness of certain fiscal policy monetary measures aimed at increasing the rates of material production and growth in the country. The research indicates that long period of government expenditure maybe unbeneficial for developing economies. Contrary to this, it is governments’ duty to determine the etymologically sound methodologies of prudent fiscal plans that will enable privatization, investments, and economic growth.
Copyright (c) 2024 Riliwan Olalekan Olanrewaju
Does FDI Matter for The Economic Growth of West Sub-Saharan African Countries? A Panel Vecm Approach
This study analyzes foreign direct investment (FDI) and economic growth in fifteen West Sub-Saharan African countries’ relationship from 1990 to 2020, with secondary panel data from the World Bank (2022), at the expense of both interest rate and exchange rate effect. The main model used is Panel VECM. The results shows that FDI helps enhance economic growth in the long run, as the estimate in the long-run indicates an increase of -121.16, which can be interpreted inversely with a 1% level of significance, with t-statistics at -14.94, despite FDI’s negative impact in the short run with an estimate of -3.5 with a level of significance of -2.16. Likewise, the effect of interest rate with t-statistics of -0.1 for economic growth and 0.1 for FDI and exchange rate with t-statistics of -0.43 for economic growth and -0.12 for FDI. Thus, both parameters are deemed insignificant. Therefore, policymakers should adopt policies that will support FDI for the long term to enhance economic growth, and reduce interests rate and exchange rates by establishing usage of a single currency or flexible exchange rates. This study aims to help policymakers and analysts determine the advantages of monitoring changes in macroeconomic fundamentals and economic growth for attracting FDI. The results of the study have significant policy repercussions, particularly for fiscal and monetary policy, particularly to resolve problems of slow economic growth to a low proportion of appropriate FDI in West Sub-Saharan African countries and other developing countries.
Technical Efficiency Performance of Halal Food and Beverages Companies in Indonesia and Malaysia
Indonesia and Malaysia are among the top most influential countries globally for halal food and beverages (HF&B). As a result, there is a perception that these nations’ HF&B companies are mature enough to have robust operational and managerial systems. This leads to a question on how HF&B companies handle unprecedented events. This paper examines the efficiency of HF&B companies, proxied by technical efficiency (TE) score in Indonesia and Malaysia over a five year period – covering the pre-COVID-19 period (2018-2019) and during the pandemic (2020-2022) –using Stochastic Frontier Analysis. The findings indicate that Indonesia's HF&B perform better over the period by showing 60% TE, whereas Malaysia's was at 50%. Interestingly, Malaysia's TE slightly increased during the COVID outbreak, whereas Indonesia showed a reverse pattern, with decreasing TE during the first year of the pandemic. Furthermore, both countries’ HF&B require further improvement, as because between 40% and 50% of the production input is inefficient, which means the production outputs are not optimal for profit. The significant factors requiring improvement from industry players are managing the cash and inventory cycle, along with adding or upgrading any necessary fixed assets such as equipment to reach productivity at an optimum level. This findings also indicate the benchmark for the HF&B industry as well as the current stage for competitiveness among the countries.
Copyright (c) 2024 Indria Ramadhani, Fatin Salwa Binti Haji Katri
Investigating Determinants of Intention in Cash Waqf Linked Sukuk for Sustainable Agriculture: The Moderating Role of Environmental Awareness
The role of cash waqf linked sukuk (Islamic bonds linked to endowments) should be developed to enhance the green economy, particularly in the sustainable agriculture sector. This study investigates the influence of Islamic religiosity, knowledge, and trust in nazhir (waqf managers) on the intention to engage in cash waqf linked sukuk transactions for sustainable agriculture. This study also analyzes the moderating role of environmental awareness as an important factor in the green economy. Primary data was collected through questionnaires disseminated to 150 respondents and Partial Least Squares Structural Equation Modeling (PLS SEM) was employed to analyze the data. The findings indicate that environmental awareness and trust nazhir are significant determinants of the intention to engage in cash waqf linked sukuk transactions for sustainable agriculture. Environmental awareness is also found to be significant in moderating the influence of Islamic religiosity. The implications suggest that to enhance community participation in cash waqf linked sukuk for sustainable agriculture, it is imperative to build trust in nazhir, increase environmental awareness, and target individuals who uphold Islamic values.
Copyright (c) 2024 Annisa Nur Salam, Fajar Andrian Sutisna
Investor Sentiment and Stock Return Volatility: Implication of The Israel-Palestine Conflict on Sharia Stocks in Indonesia
The escalation of the Israel-Palestine conflict has garnered global attention. Public condemnation through mass boycotts of pro-Israel products has significantly impacted capital markets, particularly the sharia stock market in countries with Muslim majority populations. The volatility of sharia stock returns becomes a crucial focal point in this context as it serves as a sensitive indicator of geopolitical events and changes in investor sentiment. This study investigates the connection between the volatility of sharia stock returns in Indonesia and investor sentiment as a result of the Israel-Palestine conflict. Researchers use the GARCH (1,1) model to look at how investor sentiment and the conflict between Israel and Palestine affect the volatility of Sharia stock returns indexed by the Jakarta Islamic Index (JII), using monthly data from January 2012 to February 2024. The researchers hypothesized that investor sentiment and the Israeli-Palestine conflict affect Islamic stock returns in Indonesia, but the results of this study show that the two factors have no effect on Islamic stock returns. The findings of this research provide valuable insights for financial market practitioners, investors, and regulators in understanding the impact of geopolitical conflicts on the capital market, particularly in the context of sharia stocks in Indonesia. By considering investor sentiment factors and market fluctuations triggered by such geopolitical events, this study provides a stronger foundation for wise investment decision-making and effective risk management, thereby enhancing the stability and performance of sharia capital markets in the future.
Copyright (c) 2024 Hesti Eka Setianingsih, Nurul Fauziyah, Fuad Hasyim
ZISWaf Intention Through Islamic Philanthropy Organizations: Does Empathy Matter? The Role of the S-O-R Framework and TPB
This research aims to examine the variables that affect people’s intention to pay zakat, infaq, shodaqoh, and waqf (ZISWaf) through Islamic philanthropy organizations (IPOs) in Indonesia. This research uses the Stimulus-Organism-Response (S-O-R) framework and the Theory of Planned Behavior (TPB) as the model framework. This research is quantitative with primary data, obtained through online surveys by random sampling method, with 145 respondents participating in further analysis stages using SEM-PLS. From the analysis carried out, Islamic religiosity is found to be the variable that most influences ZISWaf intention. As an indirect effect, perceived credibility is significantly proven to mediate the relationship between transaction convenience and ZISWaf intention. On the other hand, empathy is not found to have a relationship with ZISWaf intention. Several arguments may explain why empathy is not proven to be influential variable in the context of ZISWaf. These findings can be used as an academic foundation for IPOs as ZISWaf fund managers, to develop the credibility issues as a strategic step in increasing intention to pay ZISWaf through IPOs. This study makes several recommendations, including the separation of donation types based on time periods. This research offers a comprehensive model, while still considering the proven theoretical framework. From an academic perspective, this research provides a fresh viewpoint to Islamic philanthropy from an empirical-based approach.
The Role of the Core Banking System: The Case of Bank Aceh’s Syariah Conversion
The aim of this study is to assess the transformation of a traditional banking system into an Islamic banking system. Utilizing a case study approach and drawing on asset-liability theories, Bank Aceh is chosen for examination of both pre- and post-conversion. The results indicate that the implementation of Qanun (Islamic law) expedited the conversion process in Aceh, by mandating that financial institutions in the province operate under Islamic principles. A unique aspect of this research is the exploration of the conversion process from an information technology perspective, specifically examining the role of the core banking system in transitioning from conventional to Islamic banking. Additionally, the study sheds light on the accounting treatment within the core banking system during the conversion process, a previously unexplored aspect.
Copyright (c) 2024 Deni Amin Sujana, Murniati Mukhlisin
The Commonalities of Socially Responsible Investment With Islamic Finance: A Bibliometric Analysis
This study aims to evaluate the number of overviews on the commonalities of socially responsible investment (SRI) with Islamic finance by providing critical thinking in terms of the investment screening process. The main critical reviews are obtained from the articles, paperwork, and previous related studies from reputable open access journals such as Emerald, SSRN databases, and other indexed-Scopus on the Web of Science. This study finds that the commonalities of socially responsible investment with Islamic finance has seemingly been characterized as a slow-moving but unstoppable works since global movements aspire to prevent a transgression of Earth's boundaries towards financial risks. Intertemporal choice accounts for how reliable constitutes for transitioning and adapting planetary boundaries in investment decisions. The challenge is to bridge the postulated gap on the commonalities of SRI with Islamic finance leading into social and financial return aspects in order to construct long-term predictions and scenarios embodying the Islamic finance concept through environmental, social and governance (ESG) approach.
Symmetric and Asymmetric Response of the Renewable Energy Market to Indonesian Economic Trends
This study digs into the complex interplay between renewable energy market development and Indonesian economic trends. Our rigorous study aims to investigate the impact of crucial economic indicators, including gross domestic product (GDP), exchange rates, inflation, real interest rates, net inflow of foreign direct investment (FDI), and urbanisation, on the renewable energy landscape in Indonesia between 1973 and 2022. This study provides a novel insight by investigating both symmetric and asymmetric impacts in the context of Indonesia. While previous studies have limited scope with linear relationships, this study fills a gap by capturing the dynamic interplay between renewables and economic indicators. By employing a robust econometric model, we reveal interesting patterns highlighting the multidimensional nature of the renewable energy market's responses to economic trends and find that there is a long-term interplay among the variables under linear and non-linear models. We found empirical evidence indicating that the nexus is asymmetric. However, in the long term, GDP exhibits an asymmetric positive impact on renewable energy consumption in the linear model. This shows that economic growth positively correlates with Indonesia's adoption of sustainable renewable energy sources. Similarly, urbanisation shows a positive response, with expanding cities boosting demand for cleaner and greener energy. Surprisingly, exchange rates show an asymmetric response, demonstrating that depreciation of local currency has a disproportionate negative impact on renewable energy investment during economic downturns. Inflation also exhibits a negative asymmetric response due to eroding purchasing power that reduces investment in renewables. Meanwhile, net inflow of FDI emerges as a critical driver in favourable economic conditions, dramatically amplifying renewable energy capacities. Therefore, during economic recessions, FDI’s impact diminishes and emphasises the significant importance of tailored interventions. Based on the findings of this study, which demonstrate the profound interplay of how the Indonesian economy shapes and is affected by the renewable energy market, we encourage the adoption of policies that promote sustainable energy development while increasing economic resilience. We recommend that policymakers support renewable energy diversification to lessen the vulnerability of exchange rate fluctuations. Attracting FDI is also crucial, as policies can help strengthen the investment climate and bolster the renewable energy sector. Inflation-indexed incentives can help maintain confidence and foster economic growth.
Copyright (c) 2024 Safiullah Junejo, Mansur Muhammad, Herbert Wibert Victor Hasundungan
Food Insecurity and Coping Mechanism During COVID-19 Pandemic: Evidence from Indonesia
This study provides empirical evidence with respect to identifying whether the coping mechanism adopted by households in Indonesia significantly influences food security during the COVID-19 pandemic. The data used was from the fourth round of high-frequency monitoring data of COVID-19 impact on households from the World Bank (www.microdata.worldbank.org), which was collected between November 3rd – 15th, 2020 through the phone-based survey. By employing the logit regression model and controlling for demography characteristics such as gender, age, and education level, this study confirms that reducing non-food consumption has been effectively lowering the probability of food insecurity in all forms of indicators, including “were hungry” (3.3 percentage points), “went without eating” (2.0 percentage points), “unable to eat nutritious food” (6.6 percentage points), “food shortage” (9.6 percentage points), and “eat less” (5.6 percentage points). Additionally, households who relied on saving had a lower probability of 13.7 percentage points of being unable to eat nutritious food, while households who received assistance from the government had a lower chance of 2.4 percentage points of experiencing hunger during the pandemic. This study emphasizes that temporary strategies or short-term coping mechanisms such as relying on support from relatives, taking loans, and engaging in additional income-generating activities, as well as reducing food consumption may not contribute effectively to food security, instead, these types of coping mechanisms may exacerbate food insecurity. The findings of this study offer several implications in regard to enhancing the capacity of households to cope with the difficulties during crises as well as policy implications to design effective interventions in dealing with future shocks.
Determinants and Complexities of Halal Logistics in Malaysia: A Systematic Literature Review
This study employs a systematic literature review to examine the challenges of halal logistics in Malaysia, addressing a significant gap in the literature concerning the operational difficulties in maintaining halal integrity throughout supply chain processes. As the world’s Muslim population grows, understanding the complexities of halal logistics becomes crucial for industry stakeholders. Through Google Scholar and Scopus databases, this research identifies and analyzes 14 pertinent articles, focusing on the challenges within halal logistics. The thematic analysis reveals six primary challenges faced in Malaysia: high operational costs, lack of knowledge, limited demand for halal logistics services, operational complexities, inadequate management, and difficulties in the implementation of halal standards. These findings not only enhance the theoretical understanding of halal logistics but also offer practical insights for improving its implementation. By pinpointing these challenges, the study suggests a need for strategic efforts to foster market growth and service competitiveness in the halal logistics sector. Future research should broaden the review scope and explore solutions to these challenges, promoting best practices in halal logistics.
Copyright (c) 2024 Anis Husna, Mohd Faiz Mohamed Yusof, Ahmad Jafar, Ahmed Qasim Qadri
Finance and Output Volatity During The Global Financial Crisis
This paper assesses the effectiveness of financial depth and financial inclusion in the mitigation of output volatility during the 2008-2010 Global Financial Crisis. The paper also evaluates whether finance is more effective in countries with more developed financial systems, higher levels of economic developments, sounder banking systems, and better political stability. Employing a cross-sectional dataset covering more than 100 countries, our results indicate the ability of finance in subduing output volatility during the crisis. Our evidence is also concrete in suggesting the success of finance in reducing output volatility in more financially developed, advanced, and politically stable countries. However, the evidence is unclear on whether finance is beneficial for countries characterized by low, intermediate, or high banking stability. In addition to these findings, the preponderance of evidence tends to suggest the better ability of financial usage as compared to financial access in mitigating aggregate fluctuations during the crisis. Finally, our additional analysis reveals that finance functions well in stabilizing output when output volatility is high.
Copyright (c) 2024 Mansor H. Ibrahim, Siong Hook Law, Raditya Sukmana
Grounding the Applicability of Eloquent Theoretical Waqf for Rural Waste Management: A Case Study of the Gresik Industry Region
Like many other cities, the industrial region of Gresik encounters problematic issues inherent in the burgeoning quantities of waste in landfill sites despite frequent policy implementations and other efforts from the local government. This study aims to examine and interlink between the possibility of the waqf concept and the growing number of waste issues in the Gresik industrial region. By harnessing ethnographical principles such as employing direct and consistent observations and reviewing numerous relevant literature surveys and archival documents, the study attempts to propose an executable design and model that will serve as a framework for stakeholders to address the weaknesses of current less favourable waste treatment programs. A comprehensive and rigorous consideration concludes that the viability of waqf can be a workable prospect and nucleus for an alternative solution and a complementary voluntary enhancement of effective regional policies and programs. An actionable and contributable waqf aspiration can start from the reformulation and rejuvenation of a rural waste bank which is designed to manage an effective balance between profitable and eco-friendly objectives. Professionalism and competence are significant factors in successfully enhancing the functionality of such an institution. Apart from the micro perspective, the bigger picture of a nexus of waqf and waste, including the current intermittent commitment from top policy makers transferred into timely execution, futuristic applicable technology, charitable giving and donation, and sensible collaborative cooperation, constitutes the conceivable determinants for the accomplishment of an efficacious program.
Copyright (c) 2022 Ahmad Hudaifah, Fandi Angga Prasetya, Irvan Adhin Cholilie, Bambang Tutuko
The Role of Customer Intention Regarding Environmentally Sustainable Islamic Banking in Indonesia: Examining the Structural Model
Environmental degradation is a global concern for businesses, requiring consistent effort to maintain sustainable environmental practices. Environmental sustainability is a crucial issue of concern to everyone, an increasing proportion of people are paying attention to various environmental issues in all parts of their lives, including in the context of Islamic banking. This research aims to develop and test a contextual framework for studying customer intentions in adopting sustainability Islamic banking activities and services. The study uses the Theory of Planned Behavior (TPB) model, adding new constructs to the main variables, such as trust, environmental consciousness, and perceived environmental outcomes. The survey collected data from 198 customers of Islamic banks in Indonesia, with the PLS-SEM modeling technique used to test the research model. The results show that perceived behavioral control is a significant influence on behavioral intentions, while attitude and subjective norms have no significant effect on behavioural intentions. Environmental consciousness significantly affects perceived environmental outcomes, which, in turn, significantly affect trust as well as behavioural intentions. Other statistical results find that environmental consciousness can affect behavioral intentions when mediated by perceived environmental outcomes. Overall, this study has theoretical and managerial implications and offers directions for future research on environmentally sustainable Islamic banking.
Copyright (c) 2023 Fajar Sodik, Muhammad Ady Mahfuzh, Diana Olivia