Economica: Jurnal Ekonomi Islam
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Social Assistance Policies Amid the 2024 Presidential Election Contestation: An Islamic Political Economy Perspective
Full text linkThis research examines the dual function of social aid in Indonesia as a social safety net and as a political tool for the upcoming 2024 Presidential Election. This research used Fairclough's model of critical discourse analysis through the policymaking process of social assistance programmes, including articles in the online media, social aid (PKH, BPNT, KIP, and others), and the dynamics of public opinion from January to June 2024. The analysis of the data showed that in election years, the social aid budgets are increased. The social assistance is therefore politically motivated. However, these programmes help to some extent reduce poverty and improve access to education and health. Because of the political motivation, the assistance programmes lose their main social purpose. From the perspective of the Islamic political economy, the social assistance programmes should be based on maṣlaḥah al-‘āmmah. The underlying principle is the equitable social welfare of the people and the politically unmotivated equitable social wealth. This research demands that these assistance programmes and services be legally and politically unmotivated, and social welfare programmes be legally focused on the redistribution and social justice of the people, be oriented to the long-term social welfare of politically and legally unmotivated social welfare programmes
Capital Structure, Profitability and Corporate Value: The Moderation Effect of Corporate Social Responsibility in Indonesian Sharia Companies
Full text linkThis research explores the interactions among capital structure, profitability, and company value, with Corporate Social Responsibility (CSR) acting as a moderating factor. This investigation involves Sharia-compliant companies listed on the Jakarta Islamic Index (JII) of the Indonesia Stock Exchange (IDX) over the period from 2017 to 2022. Secondary data were collected from the annual reports of these companies. Employing a purposive sampling approach, the study analyzes a sample of 23 companies, yielding a total of 161 observations. To evaluate the data, moderated regression analysis was conducted using WarpPLS. The findings reveal that both capital structure and profitability exert a significant positive effect on company value, whereas CSR demonstrates an insignificant positive effect on company value. Moreover, CSR does not moderate the relationship between profitability and company value; however, CSR significantly moderates the relationship between capital structure and company value. These results highlight the critical role of capital structure and profitability in enhancing company value, particularly in the context of Sharia-compliant businesses, and contribute to both the growing body of literature and valuable insight for the supported stakeholders to optimize company performance
A Shariah-Compliant Model for Urban Development: Langsa Halal Industry and A Hub-City
Full text linkThis study explores Kota Langsa, Aceh Province, Indonesia's potential as a halal industry hub-city, addressing gaps in Shariah-compliant urban models. Novelty lies in integrating halal principles with the hub-city concept, grounded in Islamic values of justice, fairness, and sustainability, offering a fresh theoretical framework for Islamic urban economics. Adopting a phenomenological design, in-depth interviews, focus groups, and document analysis were conducted to collect data from the stakeholders. As a result, in the purpose of ensuring halal authenticity, there were significant challenges of inadequate infrastructure, lack of skilled workers, and weak regulations. Responding to the challenges, a five-pillar strategy is proposed: Halal Industry Cluster Development, Infrastructure Enhancement, Human Capital Building, Regulatory Strengthening, and Public-Private Partnerships. This model contributes to Islamic economic theory by showing how to embed ethical practices and social responsibility into urban development. It provides actionable recommendations for policymakers, urban planners, and Islamic finance experts, helping Kota Langsa to drive regional growth by bridging urban development with halal ecosystems
Halal Meat Consumption in East Java: The Role of Employement, Manufacturing, and MSME Income
Full text linkThe substantial Muslim population in East Java generates significant demand for halal meat products. Manufacturers and Micro, Small, and Medium Enterprises (MSMEs) play a pivotal role in shaping the region’s total halal meat production. This study investigates the influence of the number of workers, manufacturing operating income, and seasonal income of halal meat MSMEs on halal meat consumption in East Java province, Indonesia. Secondary data were collected from seven cities across the province over the period 2003–2022, using a purposive sampling technique. The data were analyzed using a static panel regression model via EViews version 12. The findings reveal that only the variable representing total manufacturing income in the halal meat sector has a statistically significant partial effect on overall halal meat consumption in the selected cities. This suggests that manufacturing enterprises possess distinct advantages over MSMEs in contributing to consumption levels. Conversely, the number of workers in the halal meat sector does not exhibit a significant influence on total meat consumption
Beyond Religiosity: How Social Capital Drives Institutional Zakat Payment Preferences in Indonesia - A Behavioural Economics Analysis
Full text linkNotwithstanding the fact that Indonesia has the world’s largest Muslim population, zakat collection through formal institutions is substantially below expectations. In light of this shortfall, this study investigates the interplay between religiosity and social capital on individual preferences for zakat payments and the proportion allocated to official zakat agencies, with the overarching aim of contextualizing the fiqh zakat framework in contemporary Indonesia. Drawing upon the data from a nationwide survey of 794 respondents, the empirical analysis employs Linear Probability Model (LPM) and Poisson Pseudo Maximum Likelihood (PPML) regression techniques to examine the determinants of zakat payment behaviour. Findings reveal that social capital significantly increases both the likelihood of choosing zakat institutions and the portion of zakat paid through them. In contrast, religiosity shows a weaker direct effect on institutional zakat payment. Taken together, these results highlight the pivotal role of social networks and trust in enhancing institutional zakat collection. Therefore, the study advocates for a strategic reform of fiqh zakat practices that integrate social capital strategies to reinforce religiosity and improve zakat compliance through formal channels
The Humanization of Accountability: A New Paradigm for Waqf Management
Full text linkThe practice of waqf accountability in general often places excessive emphasis on technical and financial measurements, thereby neglecting the humanitarian mission that constitutes the very essence of waqf institutions. This paper seeks to address that limitation by proposing the idea of a “humanization of waqf accountability”, an integrated framework grounded in the prophetic social thought of Kuntowijoyo. The framework rests upon three main pillars. First, active community participation, which positions beneficiaries not as passive recipients but as empowered subjects. Second, social justice, which redefines waqf as an instrument for inclusive and sustainable development rather than merely a charitable activity. Third, community well-being, regarded as the ultimate goal, is measured through holistic indicators of human dignity. By integrating these pillars, this comprehensive paradigm not only aligns waqf governance with its ethical foundations but also responds to contemporary challenges, such as the need for beneficiary-centered management and transparent reporting. In essence, this human-oriented approach provides a pathway for waqf institutions to enhance their social impact, build trust among stakeholders, and fulfill their mandate in realizing sustainable community development more effectively
Cash Flow Risk and Financial Balance: Evidence from Islamic Rural Banks in Indonesia
Full text linkThis study delves into the impact of funding liquidity risk (FLR) counting, including several bank-specific variables and the Coronavirus outbreak, on the balance of Islamic rural banks (IRBs) in Indonesia. Utilizing unbalanced quarterly panel data from 97 IRBs in Java from 2015 (Q1) to 2023 (Q4), the analysis is conducted using panel data regression. The results confirm that FLR significantly decreases bank stability. However, this negative influence was notably weakened during the COVID-19 Crisis. The analysis further reveals that the negative outcome of FLR on stability is more pronounced in smaller IRBs compared to their larger counterparts. Additionally, the findings show that while bank capital and operational efficiency enhance balance, factors such as larger bank size, high financing levels, and the pandemic period itself tend to reduce it. This research offers two key implications. Theoretically, it highlights how FLR can erode stability, a risk amplified when banks undertake high-risk investments. Practically, it underscores the critical need for especially the smaller IRBs to proactively manage asset-liability maturity mismatches to ensure financial stability
Green Human Resource Management in Islamic Finance: A Systematic Review of Sustainability Strategies in Indonesia
Full text linkThis study investigates the implementation of Green Human Resource Management (GHRM) within Indonesia’s Islamic finance industry through a systematic literature review of 375 academic publications from 2015 to 2024. Existing research has largely centered on conventional financial institutions, offering limited insight into GHRM’s role in the Islamic finance context. The review reveals that GHRM practices—such as green recruitment, sustainability training, and eco-friendly incentives—not only improve operational efficiency but also align with Maqasid al-Shariah objectives. FinTech integration further enhances green initiatives by increasing transparency and access in Islamic financial services. Nonetheless, regulatory limitations and inconsistent institutional support hinder broader adoption. A key recommendation is the introduction of Green Employee Sukuk: Shariah-compliant instruments issued by financial institutions to fund employee-led sustainability programs. Returns are tied to the performance of green investments, incentivizing employee engagement while reinforcing organizational environmental commitments. Strengthening regulatory frameworks and leveraging FinTech innovations are crucial for optimizing GHRM’s impact on sustainability in Indonesia’s Islamic finance sector
Energy Waqf and the Environmental Crisis: Advancing Islamic Philanthropy for Sustainability
Full text linkThis study examines energy waqf as an innovative Islamic philanthropic approach to addressing the growing environmental crisis. Using a literature review methodology, the research explores how religious beliefs, cultural values, and institutional trust influence community acceptance and participation in energy waqf initiatives. The findings reveal that strong religious commitment and cultural norms significantly motivate individuals to engage in such projects, which are widely perceived as acts of environmental stewardship and community service. Additional drivers of participation include emotional and psychological factors, awareness of waqf benefits, and confidence in the credibility of managing institutions. The study highlights the importance of public education and transparent governance in strengthening community involvement and ensuring the sustainability of energy waqf programs. These insights offer valuable guidance for policymakers, religious leaders, and development practitioners aiming to promote climate action through Islamic social finance. Energy waqf emerges not only as a philanthropic tool rooted in Islamic principles but also as a viable strategy for advancing renewable energy adoption and fostering environmentally conscious communities
From Values to Visits: Exploring the Economic Development Potential of Halal Tourism Through Islamic Destination Attributes
Full text linkThere is a growing acknowledgment of Halal tourism as a strategic sector for economic development in Muslim-majority countries. This research investigates how Islamic destination features, including worship amenities, halal compliance, and overall Islamic values, influence travelers’ choices to halal destinations in Indonesia, moderated by tourism image. Using a quantitative method, this study analyzed data with structural equation modeling in SmartPLS 3, based on responses from 1,000 tourists visiting Indonesia’s ten leading halal destinations. The results indicate that all three Islamic attributes significantly influence the positions of a tourist attraction, while only worship facilities directly affect visiting decisions. Destination image itself plays a mediating role in shaping tourist behavior. These results underline the importance of integrating Islamic values into tourism development strategies to enhance destination competitiveness. The study provides practical insights for government officials, including the standardization of halal certification in tourism facilities, the provision of adequate worship infrastructures at leading destinations, and the integration of halal tourism into national and digital marketing strategies. These analytical procedures enhance Indonesia’s role as a worldwide frontrunner in halal tourism. The results further emphasize halal tourism’s capacity to drive continuous local economic growth grounded in cultural and religious values