Islamic Economics Journal

The Role of Economic Growth and Economic Freedom in Moderating the Influence of Bank Health Performance on Profitability

2025-11-08T10:46:49+08:00

This study aims to analyze the effect of bank soundness on the profitability of Islamic Banks in Indonesia, with economic growth and economic freedom as moderating variables. Bank soundness is measured using the RGEC approach. This study adopts a quantitative approach, employing panel data regression analysis and Moderated Regression Analysis (MRA). The data used consist of annual secondary data from 2011 to 2024, including financial ratios from the annual reports of Islamic commercial banks in Indonesia, as well as data on Indonesia’s economic growth and economic freedom. The results show that bank soundness has a significant effect on profitability, except for GCG. Economic growth and economic freedom moderate the relationship between all independent variables and the dependent variable, except for GCG. These findings emphasize the importance of strengthening internal bank factors and macroeconomic support to enhance the profitability of Islamic banking in Indonesia.

Income, Service Convenience, and Consumptive Attitudes: Determinants of Shopee Paylater Adoption among Gen Z Consumers

2025-10-20T15:57:22+08:00

The purpose of this research is to test and analyze whether income, convenience, and consumer behavior influence the decision to use Shopee Paylater. The research method used in this research is quantitative research with a descriptive design. The analysis method used in this research uses SEM-PLS (Structural Equation Modeling - Partial Least Structural). This research data was obtained from 103 respondents as research material. In processing the data, we used SmartPLS 4.0 software for Windows 11. The results of this research show that: first, income significantly influences the decision to use Shopee Paylater; second, convenience significantly influences the decision to use Shopee Paylater; and third, consumer behavior significantly influences the decision to use Shopee Paylater. The research implies that businesses can enhance adoption by addressing these factors and tailoring their products to meet the specific needs of younger consumers, while also opening avenues for future studies on trust, risk, and cross-cultural comparisons in digital finance adoption.

The Dynamics Shaping Profitability in the Turkish Banking Sector: An Empirical Assessment

2025-07-17T18:22:46+08:00

This study empirically examines the key determinants of bank profitability in the Turkish banking sector from 2001 to 2023. Recognizing the sector’s pivotal role in macroeconomic stability and financial intermediation, the analysis employs second-generation panel econometric techniques to explore both the long-run and short-run dynamics influencing profitability. Drawing on a comprehensive dataset covering 25 banks, the study utilizes return on assets (ROA) as the dependent variable. It considers capital adequacy, deposit-to-asset ratio, loan-to-asset ratio, and non-interest income as core explanatory variables. The findings reveal robust and statistically significant long-run relationships between all explanatory variables and bank profitability. Capital adequacy emerges as the most influential determinant, underscoring the strategic importance of robust capitalization in ensuring resilience and sustained performance. In the short term, while non-interest income continues to exert a positive impact, deposit mobilization exhibits a temporary adverse effect reflecting the complexities of funding costs in Türkiye’s inflationary environment. The use of both Pooled Mean Group (PMG) estimation and Fully Modified OLS (FMOLS) enhances the credibility and robustness of the results. These findings underscore the importance of maintaining strong capital buffers, managing deposit structures effectively, supporting sustainable credit growth, and fostering income diversification through digital and non-traditional banking services. The study provides valuable insights for bank managers, regulators, and policymakers seeking to enhance the profitability and resilience of the Turkish banking system in the face of evolving macroeconomic and structural challenges.

Determinants of Students’ Entrepreneurial Interest Perspective of Islamic Business Ethics

2025-11-03T13:26:08+08:00

Indonesia is a developing country with abundant natural resources and a large population, it still faces significant unemployment. Unemployment among college graduates is a major challenge, even though they have the potential to become entrepreneurs who can help reduce it. Entrepreneurship plays an important role in driving economic growth and creating job opportunities, especially for college students who are the next generation of the nation. Therefore, higher education institutions need to direct graduates not only to focus on becoming labor absorbers but also to create their own jobs. The purpose of this study is to identify the factors influencing female students' interest in entrepreneurship from the perspective of Islamic business ethics among female students of the Faculty of Economics and Management at the University of Darussalam Gontor in 2024, with a focus on entrepreneurial literacy, motivation, and income expectations. To process the data, the authors used SmartPLS 4.0.9.9. The results of this study were obtained from the respondents' answers; entrepreneurial literacy and motivation have a positive and significant effect on entrepreneurial interest. And income expectations do not have a positive and significant effect on entrepreneurial interest. The data show that entrepreneurial literacy, motivation, and income expectations have a positive and significant effect on entrepreneurial interest. This study found that the entrepreneurial interest of Darussalam Gontor University students is influenced by entrepreneurial literacy, motivation, and income expectations in 72.1%, and the remaining 27.9% is influenced by other factors.

Integrating Mawarith in Islamic Social Finance to Advance Economic Growth (SDG 8) and Responsible Consumption (SDG 12)

2025-09-30T09:18:39+08:00

Islamic inheritance law (mawarith) provides a crucial mechanism for ensuring justice and equity in the distribution of wealth among Muslim families. Beyond its personal scope, mawarith holds significant socio-economic potential when linked with Islamic social finance. Drawing on the Islamic moral economy perspective particularly the maqāṣid principle of hifz al-māl, this study examines how utilizing inherited wealth productively, by integrating it with instruments like waqf, zakat, sadaqah, and hibah, can contribute to enhancing inclusive economic growth (SDG 8) and supporting responsible consumption (SDG 12). Using a qualitative method based on analysis of Islamic legal texts and inheritance practices, the study develops a conceptual explanation showing how mawarith ensures fair distribution, reduces the likelihood of disputes, and opens pathways for economic justice and asset sustainability. When integrated with Islamic social finance tools, mawarith has the potential to unlock dormant capital, strengthen community resilience, and encourage locally grounded economic activity. Furthermore, these mechanisms naturally help mawarith advance the achievement of SDG 8 and SDG 12, supporting inclusive growth, circular prosperity, and intergenerational equity. The paper therefore recommends raising awareness of the economic potentials of mawarith and incorporating mawarith into national development policies to realize its full potential. Mawarith linked to Islamic principles on global development goals can be a powerful tool for achieving economic inclusivity and sustainability.

Analysis of Determinants Affecting the Distribution of MSME Funds in Indonesia: A Study of the VECM Approach

2025-09-30T09:21:28+08:00

This study analyzes the dynamic relationship between Islamic monetary instruments (SBIS, PUAS, and the PLS mechanism) and the distribution of MSME financing in Indonesia, using a Vector Error Correction Model (VECM) for the period January 2014 to December 2023. The estimation results indicate significant policy transmission challenges: SBIS has a negative and significant effect on MSME financing. This crucial finding indicates that SBIS functions as a “liquidity trap,” encouraging Islamic banks to place funds in low-risk liquid instruments rather than in risky real-sector financing, such as MSMEs. Meanwhile, PUAS and the underlying PLS mechanism are statistically insignificant, indicating risk aversion and operational barriers to profit-sharing contracts. IRF and FEVD analyses reinforce the conclusion that policy transmission remains weak, with MSME financing variations dominated by internal bank shocks. Theoretically, this study reveals a critical gap in the Mudarabah-based monetary framework, where liquidity instruments sacrifice the goal of promoting the real economy. The practical implications require regulators to redesign liquidity instruments (such as SBIS) to better encourage real-sector incentives, thereby strengthening the alignment between sharia principles and national economic development.