Economics

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Open Access
Advancing the understanding of behavioral intentions towards I-Fintech : a study on Indonesian millennials and gen z
(Universitas Islam Internasional Indonesia, 2023) Siti Nur Aisyah; Aimatul Yumna; M. Luthfi Hamidi
Islamic fintech is likewise a part of the digital development and Islamic teaching is concerning the historical development. It is such a completely new for Islamic economic world to implement the technology in a daily life. Such an aftershock of Islamic finance which has not been accepted well by society, Islamic fintech is approaching the Islamic lifestyle. Conventional fintech has been well-approved by the society since Indonesian has not been concerning the Islamic value instead of the religion they believe. This leads to the lack of intention of using 1-fintech services. The intention of using a product is sometimes affected by the lack of product awareness and literacy instead. This project of the study is ensured to explore whether the society has an intention to adopt Islamic fintech services. The focus of this study is taking place on millennials and Gen Z's group as this circle of society is currently the higher adoption of technology and financially active. The questionnaire was placed on the surveymonkey.com website and shared through random sampling method. Before disseminating the questionnaire publicly, the questionnaire was tested by the piloting project to examine whether the questionnaire was valid and reliable. There are 333 respondents besides those who had been involved in the piloting project. The study was tested by SEM-PLS. The results describe that the variables, digital financial literacy, planned behavior, acceptance model and use of technology, while the three variables significantly affect the intention to adopt except digital financial literacy. Planned behavior is the most powerful factor among others. The score of digital financial literacy is considerably high where the intention to adopt is lower than the I fintech adoption rate. Moreover, DFL score is depicted to explain the current literacy on the millennials and gen z. This study was overseen only in Indonesia, aiming on millennials and gen z Therefore, the results cannot be globalized to other countries and generations. However, this study presents the critical information regarding the digital financial literacy in Indonesia to achieve the fintech industry development. On this case, where the digital financial literacy does not significantly affect the adoption of I- fintech, it could be explained that I-fintech is supposed to be explored by the Islamic Digital Financial Literacy. To the best of the author knowledge, there has been no theory representing the Digital Islamic Financial Literacy. It is suggested that the next studies could increase the number of respondents. By this study, it is aimed to obtain the best representing results for the future research about digital financial literacy and expected to be one of the concerns of the practitioner/developer of I- fintech and policy maker to improve the related regulation of I-fintech.
Controlled Access
An analysis of renewable energy demand : a case study of selected Gulf Cooperation Council countries between 1990-2021
(Universitas Islam Internasional Indonesia, 2024) Herawi, Saeed; Rima Prama Artha; Herbert Wibert Victor Hasudungan
This thesis analyzesthe demand for renewable energy in the United Arab Emirates, Qatar, Kuwait, and Saudi Arabia from 1990 to 2021. This study investigates the impact of economic, environmental, and market factors, using panel cointegration test and panel data analysis within the renewable energy demand theory framework. These factors include Gross Domestic Product (GDP), Fossil Fuel Consumption (FFC), Carbon Dioxide Emissions (CO2), Oil Prices (OIL), and the Levelized Cost of Renewable Energy (LC) on Renewable Energy Consumption (REC) in these fossil fuel-dependent nations. The study's objective isto analyze both short-term and long-term relationships between these variables. The study reveals a strong positive correlation between Income (GDP) and Renewable Energy Consumption (REC) in the selected (GCC) countries. This suggests that economic growth is a significant driver of renewable energy demand in these nations. Additionally, the findings indicate that fluctuations in Oil Prices (OIL) substantially impact (REC), with higher prices stimulating increased adoption of renewable energy alternatives. Moreover, the Levelized Cost of Renewable Energy (LC) is a critical determinant of (REC), as lower (LC) values correspond to higher adoption rates. These results emphasize the importance of economic factors in the GCC's transition to a renewable energy-based economy. However, the study found no significant relationship between Fossil Fuel Consumption (FFC) and renewable energy demand, indicating that a decrease in fossil fuel usage does not necessarily drive the transition towards renewables. The dominance of fossil fuels in (GCC) countries, supported by availability, infrastructure, and economic advantages, hinders the shift to renewables. Additionally, (CO2) emissions did not affect Renewable Energy Consumption (REC) within the studied period. This is because consumer preferences and national investments need to be stronger to shift the market towards renewables in response to (CO2) emissions changes. In addition, current environmental policies may need to be stronger to significantly impact Renewable Energy Consumption (REC), as the focus has historically been on oil production and revenue. The study recommends policies to help the (GCC) transition to sustainable energy while promoting economic growth. Key strategies include increasing renewable energy investment, reducing reliance on fossil fuels through subsidy reforms and carbon taxes, encouraging renewable technology innovation, and implementing carbon pricing. Furthermore, dynamic pricing mechanisms should adjust renewable energy incentives in response to changes in Oil Prices (OIL), ensuring competitiveness and environmental sustainability.
Open Access
An Islamic economics perspective on the determinants of indebtedness as measured by debt-to-GDP ratio : a panel regression analysis of the data from certain OIC and non-OIC member countries
(Universitas Islam Internasional Indonesia, 2023) Yadgari, Mohammad Rashed; M. Luthfi Hamidi; Fajar B. Hirawan
This thesis aims to define common causes of indebtedness, differentiate within common causes of indebtedness, assess whether fiscal and monetary policies are on a sustainable path to control debt distress and levels, and lastly, evaluate whether the ethical foundation of Islamic economics and finance provide a better way of handling the phenomenon in terms of fiscal, monetary policies and speculative investments. To accomplish these objectives, data of specified countries are taken from the World Bank, IMF. and Central Banks in terms of Debt-to-GDP ratio as the dependent variable, and FDI (net inflows), Government revenue, Government Expenditure, Export, Stocks traded value (GDP), Interest rate, GDP growth, Inflation, and Import as independent variables from 1990 to 2021, 32 years and 12 cross sections, establishing 384 observations for the study, the method consists pre-estimation tests of endogeneity and heteroskedasticity to validate basic assumptions of Ordinary Least Square regression and main separated estimation of Pooled OLS group wise for OIC, non-OIC countries with the adjustments by Heteroskedasticity Linear Regression with maximum Likelihood option. The study found that all the variables except inflation are significantly impacting Debt-to-GDP ratio regardless of separated estimation, however, the difference is that interest rate and stocks traded have a negative and significant relationship with debt for OIC countries while positive nexus for non-OIC countries, FDI has a positive and significant relation with debt for OIC countries while adversely it decreases debt for non-OIC countries with negative nexus. Export and economic growth have a significant and negative relationship for both types of countries, while imports have a positive relationship with debt. Government revenue and expenditure have a significant and negative relationship with debt for OIC countries while positive nexus for non-OIC countries. This study fills the gap of a comparative group-wise study of the macroeconomic determinants of indebtedness while calibrating initial theories proposed by major economists addressing the relationship among mentioned variables and results imply that governments shall formulate efficient policies to lower interest rates, avoid & decrease speculative investments and unnecessary spendings, and maximize revenues to control the debt levels and ensure the ability to service their debt.
Embargo
Analyzing the impact of public health insurance claims and government health expenditure on Indonesia's economy
(Universitas Islam Internasional Indonesia, 2024) Wafdah Layli Rizqiyah; Indra Gunawan; Herbert Wibert Victor Hasudungan
This study contains various discussions related to the impact of government spending in the health sector, as well as the impact of public health insurance claim costs on economic growth in Indonesia during the period 2014 - 2023. Therefore, in conducting various analyses on short-term and long-term relationships related to these variables, an approach called Auto-Regressive Distributed Lag (ARDL) is needed. In addition, as a control variable applied to the urban population and the Consumer Price Index (CPI), this variable is used with the aim of separating the various influences of independent variables related to economic growth in Indonesia. The results show that public health insurance claims have a positive and significant impact on GDP per capita and Real GDP in the short and long run. This indicates that increased access to health services through BPJS Kesehatan contributes to increased labor productivity, which in turn boosts real economic growth. Government health expenditure does not show a significant effect on GDP per capita, either in the short or long run. This suggests that government health spending may not have been managed effectively to make a strong contribution to sustainable economic growth. This finding emphasizes the importance of improvements in the allocation and efficiency of health spending to support economic growth. Control variables such as urban population and CPI also play an important role in this analysis. Urbanization impact on GDP per capita is more variable, with potential negative impacts in the short term due to pressure on infrastructure and public services. Inflation, as measured by the CPI, has a significant impact in the short term on GDP per capita but the effect does not persist in the long term, highlighting the need for prudent inflation management to maintain economic stability. Overall, this study concludes that improving access and efficiency of health insurance claims through BPJS Kesehatan can be a key driver of economic growth in Indonesia, particularly through improving labor productivity and individual welfare. However, to achieve sustainable economic growth, more comprehensive policies are needed, including reforms in the management of government health spending, better management of urbanization, and effective inflation control. The findings provide important insights for policymakers in formulating more effective and sustainable economic strategies.
Open Access
Corruption, women participation, and economic development : evidence from G20
(Universitas Islam Internasional Indonesia, 2023) Ananda Olga Ulima; Fajar B. Hirawan; Teguh Yudo Wicaksono
Women's participation in the public sphere has been increasingly prominent and impactful, resonating across various macro and microeconomic domains. Gender- Corruption issues have been recently become the focus in empirical findings of scholars. This study aims to examine the effect of women participation in public space on corruption in G20 member countries between year 1995-2021, based on panel data analysis. Under the most relaxed assumption of the model i.e., fixed effect, the result concludes that countries with high inequality is associated by higher corruption level. However, a good governance indicated from their rule of law has significant impact on reducing the level of corruption, which indicated that the policies' role and commitment set by the government institution are essential especially for those of G20's developing countries. Furthermore, the impact of women participation in parliament does not necessarily reduce corruption. Both female labour force participation and senior-middle management have a positive effect to eradicate corruption level. While under fixed effect model, the impact of these variables dissipates, suggesting that country-specific characteristics may explain the variation in the corruption level. This study suggests that promoting women participation must be followed by institutions, norms, and culture to strengthen the effectiveness of law. Moreover, next agenda of G20's board meeting can be focusing on tracking the progress of Anti-Corruption Working Group because there is still gap between developed and developing countries in terms of corruption eradication policy to gain sustainable economic development.
Open Access
Economic freedom and environmental performance : the impact of government size, legal system, and monetary stability on greenhouse gas emissions
(Universitas Islam Internasional Indonesia, 2024) Neng Zulfa Azhar; Dian Masyita; Teguh Yudo Wicaksono
This study aims to analyze the relationship between economic freedom and environmental performance specifically measured by per capita GHG emissions from 2010-2020 for OECD countries as well as non-OECD countries using fixed effects panel data regression. The results show that in OECD countries smaller government size has a significant and positive effect on GHG emissions, while in non-OECD countries, although there is a positive effect, it is not statistically significant. The legal system and property rights have a significant and negative effect in OECD countries, but in non-OECD countries, the impact is negative but lacks statistical significance. Additionally, the higher sound money in OECD countries is associated with a negative effect on GHG emissions, whereas in non-OECD countries, it has a positive effect and not significant. The EKC hypothesis is confirmed and significant in OECD countries indicating the existence of an inverted u-shaped link between GDP per capita and GHG emissions, while in non-OECD countries only the relationship is detected but not significant. Technological advancement is equally significant in increasing emissions in both OECD and non-OECD countries, as well as the influence of urbanization is equally influential in reducing emissions in both OECD and non-OECD countries. As for trade, while it has a positive effect in the nonOECD, it has a negative effect in the OECD. This research provides policy implications related to the role of government in mitigating the adverse impact of climate change and improving environmental performance through reducing emissions, one of which is through subsidy and tax regulations as well as strengthening the legal system and maintaining economic stability without sacrificing the environment in the observed countries.
Embargo
The effect of the zakat empowerment program on youth farmers’ participation : a case study of desa tani program by Dompet Dhuafa
(Universitas Islam Internasional Indonesia, 2024) Fazlullah Ihza Qaseem
The declining interest of young people in agriculture not only threatens the sustainability of the agricultural sector but also endangers the livelihoods of farming communities in Indonesia. This research examines the effect of the Zakat Empowerment Program, specifically the Desa Tani Program by Dompet Dhuafa, on the participation of youth farmers in the agricultural sector. This research uses a mixed methods approach, combining quantitative surveys with qualitative interviews and document analysis. The quantitative analysis uses the Mann-Whitney U test to compare the perceptions and outcomes of youth farmers who participated in the program with those who did not. The qualitative analysis involves thematic analysis of interviews with youth farmers from both groups, program administrators, and community leaders to gain deeper insights into the effect of the program. In addition, the Analytic Network Process (ANP) is used to assess the relative importance of various program interventions in attracting youth farmers. The findings indicate that the Desa Tani Program has benefited youth farmers’ participation in agriculture. Program participants showed higher intentions to enter agriculture, increased access to resources such as land, finance and technology, also higher incomes compared to non-participants. The qualitative analysis highlights how Dompet Dhuafa helps youth farmers by providing motivation, resource training, and creating a supportive community environment. Also, the ANP analysis identified strengthening market linkages and local institution as important interventions for Dompet Dhuafa to attract youth farmers. Based on these findings, this research offers recommendations to Dompet Dhuafa and other zakat management institutions to improve the effectiveness of their empowerment programs. These recommendations include strengthening market linkages, increasing access to resources, addressing social and cultural barriers, leveraging technology and innovation, and establishing a robust monitoring and evaluation system. The research concludes that the Desa Tani Program serves as a model for encouraging youth participation in agriculture and sustainable rural development through zakat-based initiatives.
Embargo
Evaluating the impact of islamic banking sustainability practices on financial performance
(Universitas Islam Internasional Indonesia, 2024) Basalma, Ebrahim Omar Obaid; Hamidi, M. Luthfi; Aimatul Yumna
This research aims to examine the sustainability practices of Islamic banking, their alignment with SDGs, and their effects on financial performance in GCC, Malaysian, and Indonesian contexts where these three markets occupy an important place in the Islamic finance business. Based on stakeholder engagement, legitimacy, good management, and beyond triple bottom line theories, the study uses a qualitative approach both through focused content analyses of firms’ financial & sustainability reports to develop and measure ICSP disclosure. For a quantitative approach the use of regression analysis of the panel data, the results demonstrate that ICSP has a significant and positive association with financial performance, as measured by ROE and ROA; and it enhances economic/environmental aspects of ICSP. However, the analysis of the social component reveals an insignificant value, which presupposes the improvement of communications and specific social activities. In terms of the study’s practical implications, this research enriches the conversation on sustainability and finance with findings that could be useful for tactical planning from the perspective of policymakers, regulators, and practitioners in the Islamic finance sector while also showing how the integration of Islamic banking practices and the implementation of sustainability practices can work in harmony for both financial sustainability and the generation of positive social and environmental impact.
Open Access
Examining the economic and non-economic fators on tax revenue in Indonesia
(Universitas Islam Internasional Indonesia, 2023) Adinda Rachmawati; Fajar B. Hirawan; Dian Masyita
Taxes are sometimes undermined by limitations on tax revenue measurement, despite the widespread consensus that taxes are typically a good policy instrument for evaluating the macroeconomic impact of the country's different tax policies. According to the Ministry of Finance, Indonesia's tax ratio has experienced volatile fluctuations over the past five years, and it is the third lowest of all ASEAN countries. This phenomenon can negatively impact tax revenue if not appropriately addressed by the government. This study considers various economic and non-economic indicators to assess the tax revenue. Inflation and unemployment are analyzed economically, while non-economic factors are trust and tax education. Investigating the relationship between these independent variables and tax revenue employs Panel Data Regression. The data utilized in this study were from the Directorate General of Taxes and the Central Bureau of Statistics (Badan Pusat Statistik/BPS) from 2015 to 2022. The analysis encompasses 34 provinces within Indonesia. The results of the Panel Data Regression indicate that inflation, tax education, and trust exhibit significant positive effects on tax revenue. In contrast, unemployment has an inverse impact on tax revenue. These findings offer valuable insights and recommendations to the government. The government should take a more proactive stance in managing inflation rates and addressing tax education. Tax revenue can be improved by effectively controlling one or more variables, thereby increasing tax revenue.
Embargo
Examining the regional economic integration : an analysis of cross border trade among ASEAN, China, and India
(Universitas Islam Internasional Indonesia, 2024) Abbassy, Sadia; Hamidi, M. Luthfi; Fajar B. Hirawan
Regional economic integration has been studied since the late 20th century, when global markets became freer. ASEAN, China, and India are key players in the current political, economic, and infrastructural scene. These regions have had economic development, but globalization has brought geopolitical difficulties, regulatory hurdles, infrastructural issues, trade patterns, trade policies, environmental issues, and social issues. This extensive study examines the many factors affecting economic integration in various regions. Using quantitative gravity model with Panel Data analysis over time period of 1999 to 2023, and empirical literature studies to analyse trade flows, trade policies, and the role of international trade organization on regional economic integration. Trade statistics, FDI flows, economic indicators, literature reviews, case studies, and data analysis are used to understand the contextual elements affecting regional economic integration and crossborder trade. Engagement with stakeholders improves data accuracy and policy direction. Cross-border trade and important players' roles are examined to assess multi-regional integration and economic growth, as well as the obstacles and design an innovative complete policy for the coming economic size. Whether bilateral or multinational, free trade agreements strengthen long-term cooperation over competition. ASEAN, China, and India have great economic and strategic potential, according to this analysis. ASEAN's middle-class population is expected to quadruple to 630 million, whereas China and India represent 2.87 billion people. The region could become the fourth-largest economy by 2030 due to its strength. Thus, regional economic integration increases trade volume and reduces geopolitical tensions, promoting mutual understanding and advantageous trading patterns. The findings provide crucial insights for governments, companies, and researchers managing regional economic interconnectivity.
Embargo
Factors affecting the human development status of muslim countries
(Universitas Islam Internasional Indonesia, 2024) Emil Haraki
This study analyses the relationship between human development and two types of factors: internal and external. Internal factors include economic inequality, political instability, social capital, knowledge creation, and natural resources. The external factor is colonization. The Organization of Islamic Cooperation is the second largest organization after the United Nations, consisting of 57 Muslim countries, but it is underdeveloped compared to other countries. This study comprehensively analyses Muslim countries' economic, political, social, educational, natural resource, and colonization legacies. This is because Europe colonized 44 out of 57 Muslim countries. This study uses a data panel model, consisting of 51 Muslim countries with 14 years from 2007 to 2020. To analyze the effect of independent variables on the dependent using the Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM). However, due to heteroscedasticity in the data, REM is the best model to use. The results show that economic inequality and political instability have a negative effect, knowledge creation and natural resources have a positive effect, but social capital does not have a significant effect. Colonized Muslim countries have lower human development than those that have never been colonized. It is concluded that what affects the underdevelopment of Muslim countries is high economic inequality and political instability, and colonization has a long-term impact on Muslim countries.
Embargo
Factors influencing decision to donate zakat infaq sodaqoh (ZIS) via digital payment in Indonesia : integrated TPB and TAM model
(Universitas Islam Internasional Indonesia, 2024) Suhail; Ugi Suharto; Aimatul Yumna
Donation nowadays are evolving with numerous innovations, including the use of digital transaction payment methods. In Islamic traditions, one of the common types of donations is zakat, infaq, and sodaqoh (ZIS). The increasing trend of digital transactions in Indonesia has influenced the increasing in ZIS payments through digital payment methods. This study aims to analyze predictor for factors influencing decision to donate ZIS via Digital Payment under integration of Theory of Planned Behavior (TPB) and Technology Acceptance Model (TAM) model. The population in this study comprised Muslim people in Indonesia who had made ZIS donations via digital payment. The sampling technique used was purposive sampling-quota sampling with a total sample size of 400 people. The method used in this research was an explanatory survey with a quantitative approach. The data analysis technique employed was Partial Least Squares-Structural Equation Modeling (PLS-SEM). The results of the study showed alignment between the TAM and TPB models and practice in the field regarding their influence on the decision to donate ZIS via digital payment. Results indicate that TPB and TAM model influence decision to donate ZIS moderately, and perceived value is the most significant variable in this study. Spiritual aspect has significant positive influence toward decision to donate ZIS. The research suggest ZIS institutions to enhance their digital payment systems by strengthening security, and improving features and marketing to increase customer satisfaction value and optimize ZIS collection in Indonesia through digital payment.
Controlled Access
Female labour force participation amidst the reestablishment of the Islamic emirate of Afghanistan 2021-2023
(Universitas Islam Internasional Indonesia, 2024) Haidari, Adila; Rima Prama Artha; Hamidi, M. Luthfi
Afghanistan experienced a significant decline in female labour force participation (FLFP) from 17% in 2021 to 6% in 2022, concurrently with re-establishing the Islamic Emirate of Afghanistan (Taliban) in August 2021. Thus, this study aims to investigate the factors that could have contributed to this rapid decline, explicitly examining whether the re-establishment of the regime played an essential role in this change. The study employed a mixed method approach, combining the quantitative approach using the ordinary least squares (OLS) model that estimates data from 1990-2021 with the qualitative in-depth interviews that capture a varied spectrum of respondents. This study found that political stability has the highest positive impact on female labour force participation, while the women business law index also presents a significant positive impact. However, in contrast, female education, fertility rate, and the dummy variable (representing the regime changes) significantly negatively impact FLFP. Further, qualitative findings corroborate these findings and reveal additional aspects not captured by the model, such as legal barriers, norms, security concerns, and gender discrimination, where legal barriers identified significant challenges to women's decision to join the labour market. Regrettably, these factors have been worsened by political instabilities and regime changes that further decrease women’s participation in the labour force. The results suggest the reforms in policies and regulations, thus pointing to the fact that improvements in the regulatory environment supporting female employment would also positively affect FLFP intensity.
Open Access
Financial instruments as the catalyst of sustainable forest management : an estimate on green bonds and Islamic financing
(Universitas Islam Internasional Indonesia, 2023) Milhatun Nisa'; M. Luthfi Hamidi; Teguh Yudo Wicaksono
Deforestation and forest degradation continue to persist, resulting in the loss of millions of hectares of forest annually. This is primarily driven by the exploitation of forests for short-term gains, highlighting the urgent need for sustainable forest management. However, implementing sustainable forest management requires substantial financial resources. Thus, this thesis aims to explore two potential financing streams, namely the impact of green bonds and Islamic financing provided by Islamic banking, in achieving sustainable forest management. It is important to note that achieving sustainable forest management is a complex endeavour influenced by various external factors. In addition to green bonds and Islamic financing, this thesis acknowledges the significance of macroeconomic conditions, financial bank performance, and political factors as potential determinants that can shape the success of sustainable forest management efforts. Therefore, the main objectives of this thesis are to examine the correlation between green bonds and Islamic financing with sustainable forest management (SFM) and to explore the factors that support or hinder the progress of sustainable forest management (SFM). Moreover, the G20 countries are recognized as the largest emitters of carbon emissions globally, and they have issued a significant number of green bonds as a means of mitigating their environmental impact. By focusing on the G20 countries and D-8 countries, the study aims to explore how these countries utilize green bonds to address sustainable forest management. Additionally, the D-8 countries as representatives of Muslim nations as well where Islamic financing is prevalent. Islamic financing, provided by Islamic banking institutions, is recognized for its environmental friendliness compared to other banks. Consequently, the study considered both the G20 and D-8 countries as the subjects of analysis and its cover period around 2010 until 2021. The findings of the study revealed that green bonds have a positive impact on sustainable forest management, whereas Islamic financing has a negative effect on its performance. The certain macroeconomic factors were found to significantly influence forest management outcomes in different ways. Furthermore, financial bank performance and political stability were identified as contributing factors in enhancing sustainable forest management practices. This study stands out from previous literature as it adopts a quantitative approach to explore the relationship between green bonds, Islamic financing, and sustainable forest management. Unlike prior studies that primarily employed qualitative methods, this research provides a unique perspective on the topic. Moreover, the integration of these specific themes within a single study makes it an original contribution to the existing of knowledge. The study recommends that the International Capital Market Association (ICMA) should establish standardized and globally recognized definitions and criteria for the official use of proceeds in green bonds. Additionally, the government of D-8 countries is advised to implement or strengthen regulations that incentivize Islamic banks to prioritize environmentally sustainable projects.
Open Access
Financial policy and socio-economic dimension on co2 emissions : revisiting the G20 countries
(Universitas Islam Internasional Indonesia, 2024) Andi Dzulfahmi Imran Hamzah; Teguh Yudo Wicaksono; Aimatul Yumna
The issue of climate change, driven by high concentrations of CO2 emissions in the atmosphere, has garnered global attention. Consequently, the Paris Agreement represents a commitment by nations worldwide to address climate change by agreeing to limit the rise in global surface temperature to below 2°C, and ideally below 1.5°C, by 2050. This necessitates a transition to a greener economy, which is hindered by significant funding challenges, particularly for renewable energy financing and the transfer of environmentally friendly technology. Additionally, socio-economic factors must be considered, as population growth and urbanization increase demand in the energy and infrastructure sectors. This study aims to examine the effects of climate-related financial policy through climate-related financial policy index (CRFPI) and socio-economic factors on CO2 emissions in G20 countries from 2000 to 2020. Utilizing a panel regression random effects model, the impact of exogenous variables on CO2 emissions is found to be varied. CRFPI significantly reduces CO2 emissions, as does financial development. The Environmental Kuznets Curve (EKC) hypothesis is validated, showing that in the early stages, GDP positively affects CO2 emissions; however, as GDP growth reaches a turning point, economic growth negatively impacts CO2 emissions in the long term, indicating that G20 countries are predominantly characterized by progressive economic growth. Empirical evidence, particularly regarding socio-economic factors, presents diverse results. Renewable energy consumption leads to the most substantial reduction in CO2 emissions, while the response of CO2 emissions to FDI inflows shows a positive trend, suggesting that investment flows need better alignment with environmental sustainability goals. Finally, trade openness, urbanization, population, and technology patents do not show significant impacts. Despite the dynamic nature of empirical evidence, CRFPI, through various instruments such as green prudential policy, green financial principles, green investment and credit allocation, green bonds, and other disclosure requirements, can serve as alternative financing mechanisms to achieve net-zero emissions targets.
Embargo
Governance on multidimensional poverty : the case D-8 countries
(Universitas Islam Internasional Indonesia, 2024) Chikara Nurilmi Syam; Ugi Suharto; Hamidi, M. Luthfi
The research aims to identify the characteristics of Good Governance that could potentially alleviate Multidimensional Poverty, as suggested by the Worldwide Government Indicators (WGI) proxy. It is also intended that this research will serve as a useful tool for D-8 officials and other policymakers in order to develop policies aimed at improving governance in the D-8 Organization for Economic Cooperation member countries. Using the Panel Data Analysis, the research determines the impact of governance on multidimensional poverty in the D-8 countries compared to other countries. Using data over the period of 2009 to 2022 from the World Bank Group for both dependent and independent variables. It was discovered that in the case of D-8 countries, only Political Stability and Absence of Violence, and Control of Corruption have proven to be able to mitigate Multidimensional Poverty while Voice and Accountability have proven to worsen Multidimensional Poverty in D-8 countries.
Open Access
Internet users and macroeconomic factors’ impact on Indonesia-Malaysia islamic finance index
(Universitas Airlangga, 2024-06-30) Milhatun Nisa'; Muhammad Ismail Sunni
Introduction: The rise of the internet has revolutionized the way businesses operate and people interact globally, without exception, including Islamic finance. This paper aims to investigate whether or not the level of internet users, GDP per capita, exchange rate, labor force, and poverty are the determinants of the increase of the Islamic Finance Index (IFI) in Indonesia and Malaysia. Methods: This research is a quantitative study that employs a balance panel regression and causality tests for the period 2013 to 2020 quarterly. Results: It is empirically found that there was a relationship between internet users and other macroeconomic variables on IFI in the long term, which was significant. However, only the labor force and exchange rate have significantly and negatively impacted IFI. While the remaining variables were expected to be positive, poverty uniquely did not contribute to the performance of Islamic finance. Furthermore, the empirical findings portrayed that all determinants influenced the endogenous variable, but not the contrary. Conclusion and suggestion: By analyzing and delving into the link between internet users, macroeocnomic factors and Islamic finance, this study fills the literature gap which will be a guide for both policymakers and academies to grasp what dominant variables to prioritize for the acceleration of Islamic finance rectification in both Indonesia and Malaysia, aligned with the increasing rate and impact of internet users.
Embargo
Irrational factors in decision-making to choose the sharia stock
(Universitas Islam Internasional Indonesia, 2024) Martha Purna Syiva; Ugi Suharto; Aimatul Yumna
The increasing popularity of Islamic finance has led to a growing demand for Shariacompliant investment products, including Sharia stocks. Investors who adhere to Islamic principles often seek to direct their funds towards investments aligned with their religious and ethical values. However, the decision-making process in choosing Sharia stocks may not always be rational, as various psychological and behavioural factors can influence it. Behavioural finance research has identified several irrational elements that can impact an individual's investment decisions, such as overconfidence and herding behaviour, as well as religiosity and financial literacy factors. In Sharia-compliant investments, these irrational factors may play a significant role in an investor's choice to allocate funds to Sharia stocks, potentially leading to suboptimal decisions that deviate from rational financial considerations. Thus, this thesis aims to examine the influence of overconfidence and herding behaviour combined with religiosity and Sharia stock financial literacy on the decision-making process of investors when selecting Sharia-compliant stocks. All the variables in the model proceed with the Partial Least Square - Structural Equation Modelling (PLS-SEM) method. Using primary data from 290 respondents who are Sharia stock investors in Indonesia, this study found that religiosity, Sharia stock financial literacy, and overconfidence significantly impact decision-making to invest in Sharia stock. However, religiosity did not affect Sharia stock financial literacy substantially, and Sharia stock financial literacy was insignificant in mediating between religiosity and the decision to invest in Sharia stock. The results of this study show that Sharia stocks as Sharia-based investing instruments cannot separated from the ideological irrational aspects. Investors with a high sense of religiousity, literacy, and confidence in the Sharia value of a stock are the crucial factors in convincing them to choose a Sharia-based investing instrument.
Controlled Access
Natural shocks, economic risks, health and social risks impact on food security in Indonesia
(Universitas Islam Internasional Indonesia, 2024) Melani Sukma Yuridis; Rizky Wisnoentoro; Rima Prama Artha
This study aims to elucidate the evolution of food security in Indonesia from 2017 to 2022 and to ascertain the impact of natural shocks (meteorological, hydrological, geophysical, climatological hazards), economic risks (inflation, GDP per capita, trade, and savings), as well as health risks and social risks (biological hazards) on food security during this period. In order to achieve the aforementioned objectives, this study employs descriptive analysis and panel data regression techniques. It is regrettable that the results demonstrate that only La Niña and El Niño, in addition to trade, exert a considerable influence on food security. As extreme climate phenomena, La Niña and El Niño exert a considerable influence on rainfall and temperature patterns, which in turn impact food production and availability. The results indicate that increased trade can help reduce food insecurity by redirecting surpluses from production areas to less well-off areas. The variables representing disasters, including natural shocks (meteorological, hydrological, geophysical, climatological) as well as health and social risks (biological hazards), do not exert a significant effect. This is due to the fact that the model may be unable to adequately capture the specific conditions of the number of disaster events, which can vary considerably depending on the type of disaster or the region in question. Furthermore, the economic variables of inflation, GDP per capita, and savings have no significant impact, as the model has been unable to adequately capture the fluctuating economic conditions of Indonesia during the data year under study.
Open Access
Potential customers' intention to use Islamic banking products in Cameroon : the mediating effect of attitude
(Universitas Islam Internasional Indonesia, 2023) Hamadou, Issa; M. Luthfi Hamidi; Aimatul Yumna
Islamic finance is not limited to the world's approximately 1.7 billion Muslims. Several additional countries, including the United Kingdom, France, Belgium, and Germany, are also interested. They show their willingness to adopt Islamic financial products for the purpose of inclusive finance and satisfaction of financial needs of the Muslim minority population of these countries. However, although the primary goal of Islamic finance financial inclusion, it has been observed that in some Muslim countries as well as non-Muslim countries, the majority of the people are excluded from the traditional system for religious reasons. This study examines potential customers awareness of Islamic banking products in Cameroon and factors influencing their decision. To achieve this, a structured questionnaire was used with 318 respondents, while 300 were usable for analysis with 94% of respondents rate. The research used SEM-PLS to estimate the data. In addition, an interview with 10 participants was conducted to support the quantitative results. The findings suggested that potential customers knowledge of Islamic banking operations is limited. Most of them are not completely mindful of Islamic financing instruments. Moreover, the study found that attitude, religious motivation, awareness, subjective norm, and relative advantage significantly affect their intention towards Islamic banking products, while perceived regulatory and perceived innovation are not significant. Furthermore, attitude has a substantial mediating role on the connection amongst religious motivation, subjective norm, awareness, relative advantage, perceived innovation, and intention to adopt Islamic banking products. Therefore, the findings of this study contribute to the past literature by providing new framework that combines the theories of planned behavior and diffusion of innovation theory and offers managerial implications at the level of Islamic finance operators. Meanwhile, this research provides some policy recommendations that can help to boost the growth of Islamic finance in Cameroon in order to promote financial inclusion.