Economica: Jurnal Ekonomi Islam
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Islamic Finance-Growth Nexus: Evidence from Malaysia
Full text linkFor many years, a plethora of theoretical and empirical studies have illustrated the relationship between financial activities and economic growth. The impact of the Islamic financial system and its instruments on economic growth has begun to emerge in recent years, parallel with its development. This study is designed to contribute to the development of Islamic finance as well as contribute to the literature by revealing the causal relationship between the development of Islamic finance and economic growth. To serve this purpose, an examination in the context of Malaysia, which has progressed more than other countries in terms of Islamic financial development, has been carried out. In exploring the causal relationship between the development of Islamic finance and economic growth in Malaysia, four variables representing Islamic banking, Sukuk market, and Islamic stock market on the gross domestic product (GDP) are discussed through data from the first quarter of 2006 to the first quarter of 2020. To analyze the relationship of the variables within the framework of the VAR model, the Johansen cointegration test, impulse-response functions, and variance decomposition was used. This study corroborates the literature on the effect of the financial sector development on economic growth by taking Islamic finance into account
Harnessing the Potential of Halal Tourism: Strategies for Sustainable Economic Development in Central Java, Indonesia
Full text linkThis study explores strategies for leveraging halal tourism to promote sustainable economic development in Central Java, Indonesia. As a pilot province for halal tourism, Central Java offers a unique case within this growing market segment. Using qualitative methods, the research integrates primary data from stakeholder interviews with secondary data from local tourism records. The findings indicate that while the halal tourism sector in Central Java shows promise, there are significant opportunities for further development. Key strategies identified include segmenting tourist destinations into historical, nature, and cultural categories, and creating regional tourist routes to improve accessibility and enhance the visitor experience. This study stands out by linking halal tourism with sustainable economic growth, aligned with the G20 agenda, providing novel insights and practical recommendations for policymakers and industry stakeholders
Developing Sustainable Hajj Funds: Innovative Cash Waqf Investment Models
Full text linkThe Indonesian Sharia Economic Masterplan (MEKSI) 2019-2024 presents a detailed plan for the growth of the Islamic financial industry. It focuses on combining the fiscal, commercial, and ZISWAF (Zakat, Infaq, Sadaqah, and Waqf) sectors to promote economic inclusivity. The objective of this study is to assess the management mechanism of the Hajj Fund by BPKH and investigate alternative investment models that make use of cash waqf to enhance the efficiency of fund management. The technique encompasses an extensive examination of existing literature, both qualitative and quantitative evaluations, interviews with relevant stakeholders, and a comparative analysis of successful models implemented in other countries. Financial modeling is utilized to simulate the effects of various asset allocation methods. The results suggest that integrating cash waqf into BPKH's current procedures can lead to considerable improvements. Cash waqf offers higher financial returns and larger social welfare benefits through targeted investments in Sharia-compliant financial instruments such as Sukuk. The iterative process of allocating and reinvesting income guarantees the long-term viability and expansion of Hajj funds. The study highlights the capacity of cash waqf to strengthen financial stability and social influence, in accordance with Islamic principles and promoting economic growth. These findings have significant ramifications for politicians and financial managers in enhancing the management of Hajj funds to more effectively cater to the needs of the Muslim community
Comparative Analysis of Financial Performance in Indonesian Islamic Banks: The Impact of Spin-Offs, Mergers, and Conversion
Full text linkThis study conducts a comparative analysis of Indonesian Islamic banks' performance before and after spin-off, merger, and conversion. Using a quantitative approach, the research applies paired t-tests and Wilcoxon tests to assess financial performance across six categories: liquidity, financing, efficiency, profitability, capital adequacy, and non-performing financing. Data from six Islamic banks over ten years were analyzed, comparing performance pre- and post-establishment. The findings reveal no significant differences in performance for banks that underwent pure spin-offs. However, banks formed through mergers demonstrated improvements in operational efficiency, return on assets (ROA), and capital adequacy (CAR), while conversions exhibited strong financing performance but faced capital risk and lower profitability. These results suggest that mergers offer a more efficient establishment method for enhancing bank performance, while conversions require careful capital management. The research highlights the importance of strategic decisions regarding the choice of establishment method for Islamic banks, with significant implications for bankers and policymakers aiming to optimize Islamic bank performance
Prevention of Tabzir in Muslim Households Food Consumption
Full text linkIslam forbids tabzir (wasteful behavior) concerning food and all activities. However, Indonesia, which has a Muslim-majority population, is among the countries with the highest levels of food loss and waste globally. Food waste has a detrimental impact on the environment, economy, human health, and food security, hindering the achievement of the SDGs. This study aims to examine Muslim households' consumption patterns and identify food waste prevention strategies. A qualitative SWOT-ANP technique was applied using nine respondents, including experts, academics, and practitioners. The findings suggest that households, from an internal perspective, should prioritize sharing surplus food with those in need, as well as adopting thoughtful shopping and cooking habits, avoiding the tendency to over-purchase or over-prepare food. Three external strategies were identified: (1) campaigns by governments, agencies, and communities to raise awareness of food waste's negative effects; (2) education on proper food processing, storage, and management; (3) policies regulating food waste prevention and management. Ultimately, preventing food waste behavior requires the collaboration of all parties, including the government, religious authorities, communities, and households
Attitude and Behaviour Intention of Muslim Z Generation to Save in Islamic Banks: The Role of Knowledge and Religiosity
Full text linkThis study aims to investigate the impact of knowledge and religiosity on attitudes toward Islamic banks and the saving intentions of Generation Z Muslims. Data were collected using a convenience sampling method from students at Islamic higher education institutions in Central Java, Indonesia. A total of 210 respondents aged 17-27 participated in the study. The data were analyzed using Structural Equation Modeling-Partial Least Squares (SEM-PLS). The findings reveal that both knowledge and religiosity significantly shape attitudes toward Islamic banks among Generation Z Muslims. Knowledge emerged as the most influential factor shaping attitudes. Attitudes, in turn, significantly influence the saving intentions of Generation Z Muslims at Islamic banks. This study further demonstrates that attitudes are the strongest determinant of the saving intentions of Generation Z Muslims at Islamic banks. Practically, this research provides valuable insights for Islamic bank marketers in formulating strategies to attract Generation Z Muslims to save in Islamic banks. Theoretically, this study affirms the importance of integrating cognitive, affective, and spiritual dimensions in consumer behavior analysis to better understand and predict behavior
Modern Payment Solutions for Zakat Fitrah: a Shariah Legal Examination of Pay Later Systems in Marketplaces
Full text linkThis study examines the use of Pay Later systems offered by digital marketplaces, such as Gopay and Shopee, as a method for fulfilling zakat fitrah obligations. While financial technology has enhanced accessibility and efficiency in zakat management, its integration with credit-based instruments raises significant Shariah concerns. This study is contextualized from a qualitative approach that combines normative legal analysis with digital ethnography, exploring whether deferred payment models align with Islamic jurisprudence and the objectives of Shariah. We highlight findings that although Pay Later provides convenience for zakat payers, it introduces elements of debt that risk contradicting the principle of immediacy in zakat fitrah. Nonetheless, under certain circumstances, such as compliance with DSN-MUI regulations and avoidance of riba, Pay Later may be considered permissible as a means of fee. This paper contributes to the growing discourse on Islamic fintech by clarifying the legal and ethical boundaries of credit-based worship payments and offers practical recommendations for zakat institutions to collaborate with fintech providers while safeguarding the integrity of religious obligations
Empowering Higher Education Funding through Cash Waqf: A Case Study of IPB University
Full text linkThis study explores the role of cash waqf as a financial source for universities, focusing on its management and impact at IPB. The institution overseeing cash waqf at IPB operates with principles of good governance, transparency, accountability, and professionalism. Fundraising is conducted both online and offline, with a consistent monthly auto-debit system from faculty and staff salaries. Additionally, IPB actively involves the community in waqf contributions. Investments of cash waqf funds occur in both financial and real sectors, including deposits and cash waqf-linked sukuk in collaboration with BWI. The allocation of cash waqf benefits is executed through direct and indirect mechanisms. Direct benefits include scholarships, community empowerment programs, infrastructure development, research funding, and social responsibility initiatives. Indirect benefits support character development, religious events, Covid-19 care programs, and educational assistance. Furthermore, IPB distributes waqf-generated resources through medical equipment donations, scholarship programs, water station installations, and burial support. These efforts highlight the strategic role of cash waqf in enhancing university sustainability, fostering social welfare, and strengthening educational institutions. The findings emphasize the significance of structured waqf management in optimizing its benefits and ensuring long-term impact within the academic and social domains
Mapping Zakat Potential at the City Level in Indonesia and Strategies for Optimizing Zakat Collection
Full text linkZakat, a core pillar of Islam, serves as an essential tool for wealth redistribution and socio-economic welfare. Despite Indonesia being home to the largest Muslim population globally, research on its zakat potential remains underdeveloped. This study aims to map the zakat potential across 510 cities and districts in Indonesia and propose strategies for optimizing zakat collection. Using the Indicators for Zakat Potential Mapping (IPPZ) framework developed by PUSKAS BAZNAS in 2019, secondary data from various official sources were aggregated to estimate zakat potential by province and zakat object. The results show that DKI Jakarta has the highest potential, totaling IDR 64.5 trillion, followed by East Java and West Java. Zakat on agricultural products, livestock, cash, corporate zakat, and professional income are the key contributors to this potential, with regional variations. The study's novelty lies in its detailed local-level zakat mapping, offering fresh insights into regional zakat potential. Additionally, it presents innovative strategies for enhancing zakat collection through decentralized efforts at the village, sub-district, and city levels, contributing to more effective zakat management and socio-economic development in Indonesia
Mindring: Bridging Islamic Economic Principles and Business Practices in Indonesia’s Furniture Credit Industry
Full text linkThis study examines strategies for utilizing halal tourism as a driver of sustainable economic development in Central Java, Indonesia, a pilot province for this niche market. With a focus on Muslim travelers seeking culturally and religiously appropriate experiences, the research integrates primary data from stakeholder interviews and secondary data from local tourism records. The findings highlight that while Central Java’s halal tourism sector shows considerable potential, it remains in its early stages, with significant opportunities for growth. Key strategies identified include categorizing tourist destinations into historical, nature, and cultural segments to better tailor marketing and improve visitor experiences. Additionally, creating regional tourist routes is suggested to enhance accessibility and navigation for tourists. The study emphasizes the importance of aligning halal tourism efforts with sustainable economic growth, particularly in the context of the G20 agenda. By linking halal tourism with broader economic strategies, the research provides actionable insights for policymakers and industry stakeholders to strengthen local business capacities and boost the economic resilience of the region. This approach positions halal tourism not only as a cultural offering but also as a pivotal component of Central Java’s long-term economic development strategy