Economica: Jurnal Ekonomi Islam
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Bridging Sustainability and Profitability: An Analysis of Green Accounting and CSRD in Sharia-Compliant Mining Firms
Full text linkProfitability is a key indicator of corporate performance and sustainability, especially for firms operating under Islamic principles that must balance financial goals with religious, social, and environmental responsibilities. Green accounting and corporate social responsibility disclosure (CSRD) have emerged as mechanisms to strengthen reputation, stakeholder trust, and compliance. However, most prior studies examined these variables separately with inconsistent results, leaving a gap in understanding their combined effect on profitability in sharia-compliant sectors. This study addresses that gap by analysing the influence of green accounting and CSRD on mining companies listed in the Jakarta Islamic Index (JII) during 2016–2021. Using secondary data from financial statements and sustainability reports of six firms, profitability was measured through Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). Regression results show green accounting significantly improves all profitability indicators, while CSRD positively affects ROA and ROE but not NPM. The novelty lies in integrating both variables in an Islamic mining context over six years, offering new evidence that sustainability practices enhance profitability while reinforcing sharia compliance
Can Social Media Drive Tax Compliance? Insights from Muslim Generation Z, Millennials, and Sharia Perspectives
Full text linkThis study aims to test whether digital transformation using social media attributes can push towards compliance with tax regulations and provisions. This type of research is quantitative and the analysis method uses a partial least squares structural equation modelling (PLS-SEM) approach. Data were obtained from an online questionnaire of 128 respondents and processed using the Smart PLS tool. The results of the study found that tax literacy has a positive effect on tax compliance. The use of social media has a positive relationship with tax compliance, eventually, the moderation model of social media use is not able to strengthen the relationship between tax literacy and tax compliance. First, this study examines the potential for digital transformation and information disruption in the era of the industrial revolution 4.0 with social media attributes as leverage and drivers of compliance. Second, this study chose subjects in the Moslem digital generation (Muslim generation z and millennials) because they tend to be more responsive in receiving information, are drivers of innovation in the digital era, and have the potential to become taxpayers in the future
Tax Policy and Muslim Consumer Behavior: Evidence from Indonesia’s Retail Sector
Full text linkIndonesia’s retail sector faces challenges adapting to recent VAT policy changes amid ongoing recovery from the COVID-19 downturn. This study examines the relationship between the VAT rate increase—from 11% to 12% in April 2022—and consumer purchasing power, using a mixed-methods approach grounded in Islamic ethics. Conducted across five major Indonesian cities, the analysis reveals that the tax increase has spurred improvements in financial planning, with 78% of respondents reporting more structured shopping behavior. Consumer adaptation strategies—including digital tools and loyalty programs—resulted in 15–20% savings. Demand elasticity varied by product type: essential goods showed low elasticity (-0.3), while non-essentials exhibited higher elasticity (-1.2), reflecting consumer prioritization. The retail sector demonstrated resilience, growing from 3.2% to 4.2%, with operational efficiency rising from 82% to 88% and digital transformation reaching 87%. These findings offer empirical support for the positive effects of fiscal adjustments and highlight the role of Islamic ethics in promoting prudent, purposeful consumption
The Impact of Intellectual Capital, Islamic Corporate Governance, and Zakat Disclosure on the Financial Performance of Islamic Commercial Banks in Southeast Asia
Full text linkIslamic commercial banks play a vital role in Southeast Asia’s financial sector, adhering to sharia principles that shape banking operations and performance. This study examines the impact of intellectual capital (VACA, VAHU, STVA), Islamic corporate governance (BOD, AC, BOC, DPS), and zakat disclosure (ZD) on financial performance. Using a quantitative approach, it analyzes secondary panel data from 2016–2022, with 81 observations, employing EViews 10. The findings reveal that VACA, STVA, BOD, AC, BOC, and DPS have no significant impact on financial performance. However, VAHU positively affects financial performance, while ZD has a significant negative effect. Collectively, all independent variables significantly influence financial performance, with an R² of 48%, indicating that 48% of financial performance is explained by these factors, while 52% is influenced by others. These results emphasize the importance of human capital efficiency and zakat transparency in shaping financial performance. Governance structures may require further refinement to enhance their impact. Future research should explore additional variables, extended study periods, and alternative methodologies to deepen the understanding of financial performance drivers in Islamic commercial banking
Usury and The Hijrah from Ribā Movement in Indonesia: An Interpretative Phenomenological Inquiry
Full text linkDiscussions about usury often spark long debates, as well as raise ambivalence. There has been a lot of literature highlighting the dynamics of this issue with various emphases. With the growing discourse on the establishment of Islamic economics in Indonesia, the Hijrah from Ribā movement originating from the grassroots is interesting to observe. However, there is still little literature that explores their personal world of experiences. This study seeks to understand how Islamic economic activists view usury. Three informants from the Special Region of Yogyakarta (DIY) Indonesia were selected for this study to be interviewed in a semi-structured manner. Interview transcripts were reviewed qualitatively using the IPA (Interpretative Phenomenological Analysis) approach. Data analysis revealed five superordinate themes: (1) business as usual, (2) a turning point, (3) learning process and role of the MUI fatwa, (4) post-hijrah spiritual experience, and (5) creative action: beyond debate. The findings of this study demonstrate the complexity of the psycho-social economic dimension, which has been neglected and is often ignored in the realm of modern positivism culture, which assumes economic reality to be autonomous and deterministic. Some methodological notes were also put forward to provide another facet in the development of Islamic economics research
Profit-Loss Sharing in Islamic Banking: Global Insights from a Systematic Review
Full text linkIslamic banking emerged as a response to the limitations of interest-based financial systems, offering alternative models rooted in Shariah principles—chief among them the profit-and-loss sharing (PLS) mechanism. This study re-examines the implementation of PLS in Islamic banks, identifying key challenges and outlining directions for future research within the framework of Shariah-compliant financial practices. Employing a systematic literature review of Scopus-indexed journal articles, the study compares theoretical foundations and empirical evidence surrounding PLS applications in contemporary Islamic banking. Findings indicate that PLS practices remain only partially aligned with Shariah principles, constrained by insufficient regulatory oversight, heightened credit risk, and moral hazard concerns. The study also identifies critical gaps in community awareness and operational management, underscoring the need for product innovation, stronger governance structures, and targeted educational initiatives. These insights point to three strategic priorities for stakeholders: enhancing governance to mitigate moral hazards, integrating macroeconomic policy support to improve PLS scalability, and expanding public education to close knowledge gaps. Together, these measures can support a more sustainable, equitable, and competitive Islamic banking sector
How to Increase Foreign Direct Investment Inflows in OIC Countries: A Green Economy Model
Full text linkOIC countries face the challenge of attracting Foreign Direct Investment (FDI) while ensuring sustainable economic growth. In practice, traditional investment strategies ignore the role of environmental policies and governance in investor decision-making. This study aims to determine how green economic policies and institutional quality can influence FDI inflows in OIC countries to promote economic resilience and sustainability. This research uses explorative qualitative methods with several case studies to assess the relationship between governance, economic policy, and environmental sustainability. The results of this study suggest that strong institutions, transparency, and well-structured green policies can increase investor confidence. In addition, countries with stable political conditions, anti-corruption measures, and regulatory availability can attract more FDI, especially in the green sector. However, inefficient governance, environmental degradation, and inconsistent policies hinder investment in many OIC countries. This study implies that the OIC Government should strengthen the institutional framework, promote sustainable economic policies, and create a stable business environment. In addition, investing in green infrastructure and encouraging private sector involvement in environmentally friendly industries will increase FDI and drive long-term economic growth
The Resilience of Sharia Insurance in MENA During the COVID-19 Pandemic: An Analysis of Financial Performance
Full text linkThe COVID-19 pandemic affects financial institutions worldwide, including Islamic financial institutions such as sharia insurance. This research focuses on sharia insurance in the Middle East and North Africa (MENA) that provide governance mechanisms and audit quality. The value of sharia insurance income in the MENA did not show a certain trend during the study period, although there were some extreme values during this COVID-19 pandemic. This study aims to examine the effect of the COVID-19 pandemic on sharia insurance earned in MENA. The quarterly data from 2010 to 2020 is used with panel regression as an analytical tool. As a result, the COVID-19 pandemic had no significant effect on sharia insurance earned in MENA. On the other hand, net income, long-term investment, assets have a significant effect. It shows that most sharia insurance in the MENA can survive during the COVID-19 pandemic. This study also confirms that Islamic financial institutions are still the best in their ability to stay during the COVID-19 pandemic. Moreover, sharia insurance is an alternative for welfare protection for residents in the MENA
Assessing Halal Investment Sensitivity to Cash Flow and the Impact of Capital Market Imperfections: The Case of Asian Countries
No full textThe study empirically examines the relationship between Halal investment sensitivity and the cash flow, as well as the effect of capital market imperfections on sukuk-dependent enterprises in selected non-financial listed companies of the stock markets in six countries, which are Bahrain, KSA, UAE, Kuwait, Qatar, and Malaysia. The study adopts fixed effect model and conducted over the period of 2018-2022 for 240 non-financial listed companies on the stock markets. The study findings show that at the 5% level, cash flow has a significant and positive effect on investment sensitivity in both conventional and Islamic enterprises, where the coefficients of cash flows were 0.176 and 0.143, respectively; this means the effect is significantly greater in conventional enterprises that are more constrained. The coefficients of fund flows, institutional ownership, and the index of corporate governance variables have a significant and negative effect on the sensitivity of investment to cash flow in both types of enterprises. When these variables increase, the sensitivity of investment to cash flow will diminish due to decreasing in capital market imperfections. The implication of this study may help beneficiaries in making better policy decisions and provide guidance for corporate managers.
Optimizing Zakat Management: The Agricultural Sector’s Role in Poverty Reduction in Indonesia and Malaysia
Full text linkThe development of welfare systems and income tax in the 20th century shows religious practices in poverty alleviation, especially zakat in Islamic tradition. In Indonesia and Malaysia, zakat management is an effort in poverty alleviation, but challenges remain, especially in the centralized system in Malaysia. This study aims to examine the effectiveness of agricultural zakat management in Indonesia and Malaysia, including comparing its implementation and impact in the agricultural sector. This study uses a qualitative method, using a comprehensive literature review and content analysis based on Creswell's qualitative research framework. The results of this study indicate that agricultural Zakat has significant potential to increase zakat income and support poverty alleviation. In Indonesia, where agriculture is a major economic sector, the impact is very prominent. However, better governance and digital integration are needed for optimization. Collaboration between the government, zakat institutions, and the community is essential in order to maximize the role of zakat in economic empowerment. This study contributes to the comparative analysis of zakat management in the two countries and highlights the need for local strategies to increase its effectiveness in poverty alleviation