Can Sharia Finance Affect Indonesia’s Economic Growth?

Authors

  • Mirdha Fuadi Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia
  • Suriani Suriani Department of Economics, Faculty of Economic and Business, Universitas Syiah Kuala
  • Teuku Zulham

DOI:

https://doi.org/10.56225/ijfeb.v1i3.32

Keywords:

Economic Growth, sharia shares, sharia banking financing, sharia mutual funds, Sukuk

Abstract

This study determines the effect of sharia bank financing, sharia mutual funds, sharia shares and Sukuk on Indonesia's economic growth in the long and short term and analyzes the balanced relationship between the independent variable and the dependent variable using the ARDL method. Stationarity testing using the Augmented Dickey-Fuller Stationary (ADF) approach, from March 2011 to September 2021. The results found that the long-term estimation of Sukuk has a positive and significant effect on economic growth while sharia bank financing, mutual funds and sharia stocks have no impact on economic growth. In the short term, the Sharia bank financing variable has a positive and significant impact on economic growth. Then, the results of the bound test estimate show that there is a short-term and long-term equilibrium relationship. Through the results of this study, it is hoped that it can be used as material for consideration by investors in making decisions to invest in the sharia financial market and to the government, it can be used as material for evaluating economic policies so that investment in sharia finance in Indonesia is growing.

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Published

2022-09-30

How to Cite

Fuadi, M., Suriani, S., & Zulham, T. (2022). Can Sharia Finance Affect Indonesia’s Economic Growth?. International Journal of Finance, Economics and Business, 1(3), 166–176. https://doi.org/10.56225/ijfeb.v1i3.32