Journal of Islamic Economics Lariba

Integration of leadership styles and its impact on work motivation and managerial effectiveness in Islamic banking‎

2025-09-19T04:16:52+00:00

Introduction
In today’s dynamic and competitive organizational landscape, leadership is a critical determinant of work behavior, motivation, and managerial effectiveness. In the Indonesian Islamic banking sector, leadership presents unique challenges due to the need to balance operational efficiency with Islamic ethical and spiritual values. Despite asset growth, reports from the Financial Services Authority (OJK) highlight stagnation in organizational effectiveness attributed to weak employee motivation and commitment. While Islamic leadership has shown potential to enhance work culture and motivation, its integration into management practices remains inconsistent.
Objectives
This study aims to empirically examine the effects of transformational and transactional leadership styles on managerial effectiveness, mediated by Islamic leadership and work motivation, within the context of Indonesian Islamic banking. The study addresses gaps in the literature regarding the mediating role of Islamic values and work motivation and compares the effectiveness of two dominant leadership styles in a religious-based organizational setting.
Method
Using a quantitative explanatory research design, the study surveyed employees from three Islamic bank branches in Kendari, Southeast Sulawesi, Indonesia. The total sample consisted of 57 respondents selected through purposive total sampling. Data were collected via a structured questionnaire using validated Likert-scale instruments. Data analysis employed Structural Equation Modeling–Partial Least Squares (SEM–PLS) using SmartPLS to evaluate both measurement and structural models, ensuring robustness for small sample sizes and non-normal data distributions.
Results
The analysis revealed that both transformational and transactional leadership significantly influenced managerial effectiveness, with Islamic leadership and work motivation acting as partial mediators. Transformational leadership demonstrated a stronger direct and indirect effect compared to transactional leadership. Islamic leadership emerged as a pivotal mediating variable that bridged modern leadership styles with religious organizational contexts, enhancing motivation and managerial outcomes.
Implications
The findings provide theoretical insight by introducing a new conceptual model positioning Islamic leadership as a core mediating construct in leadership dynamics. Practically, the study offers actionable strategies for Islamic bank leaders to align spiritual values with performance targets, informing policy development and training programs on Islamic leadership capacity building.
Originality/Novelty
Despite growing interest in leadership models in Islamic organizations, few studies have systematically examined the mediating roles of Islamic leadership and work motivation in linking transformational and transactional leadership styles to managerial effectiveness—particularly within the Indonesian Islamic banking sector. Moreover, comparative evaluations of these two leadership styles in religious-based institutions remain underexplored. Addressing this gap, the present study proposes an integrative model that reflects both the spiritual context of Islamic organizations and modern leadership theory.

Designing an integrated Halal value chain model for sustainable fisheries: A case study from northern coastal of Java, Indonesia

2025-09-19T04:17:00+00:00

Introduction
The concept of the halal value chain has been widely applied in the food, logistics, and pharmaceutical sectors to ensure the halalness of products from upstream to downstream. However, the fisheries sector, particularly in the northern coastal region of Java, lacks an integrated halal value chain model that incorporates sustainability principles.
Objectives
This research aims to design a contextual halal value chain model that combines halal and sustainability aspects at each stage of the fisheries value chain.
Method
A case study-based qualitative approach is used with secondary data analysis from various official and academic sources. The analysis is conducted through content analysis, thematic synthesis, and mapping of halal critical points across five main stages: production, collection, processing, distribution, and consumption.
Results
The findings indicate that business actors do not fully comprehend halal standards, lack effective halal logistics, and have a weak certification and supervision system.
Implications
The proposed model emphasizes the importance of halal control, the integration of economic, social, environmental, and health sustainability, and the active participation of local communities. This model is expected to increase the added value of fishery products, expand access to the global halal market, and strengthen the sustainability of the coastal fisheries sector.
Originality/Novelty
This research contributes to the development of the halal value chain theory in the context of the fisheries industry, providing applicable policy implications for strengthening the national halal economy.

Integration of knowledge sharing and training transfer to enhance sales promotion girls’ performance for Islamic products: A qualitative study‎

2025-09-19T04:16:50+00:00

Introduction
In today's competitive marketing environment, knowledge sharing and effective training transfer have become essential strategies for enhancing employee performance. This study investigates how these two mechanisms influence the performance of Sales Promotion Girls (SPGs) for Unilever’s Islamic product lines in Kendari City, Indonesia.
Objectives
The research aims to examine the roles of knowledge collecting and knowledge donating, as well as the transfer of training outcomes, in strengthening SPG communication and sales skills.
Method
Using a qualitative-descriptive approach, data were collected through 25 in-depth structured interviews, participant observations, and document reviews involving selected SPG participants and supervisors. Thematic analysis was conducted manually using the interactive model, encompassing data reduction, data display, and conclusion drawing.
Results
The findings reveal that formal knowledge collecting—mainly through structured training sessions—improves understanding of personal selling concepts and Unilever’s Islamic products. Informal knowledge sharing, including peer discussions, enhances practical skills but still faces challenges in conceptual depth. The study also finds that knowledge donating, although beneficial, is hindered by time constraints, uneven knowledge levels, and limited organizational recognition. Additionally, the transfer of training—delivered by Unilever’s internal supervisors and brand-specific trainers—is significantly influenced by hands-on field practice, collaborative coworker support, and motivational incentives, especially recognition from management for successfully applying training content.
Implications
These findings highlight the importance of integrating formal and informal knowledge-sharing mechanisms with practical training transfer strategies. The study implies that companies should provide applied learning opportunities and structured appreciation programs to foster a more collaborative and adaptive work environment that supports SPG performance.
Originality/Novelty
This research offers novel insights into how knowledge dynamics and training transfer operate within the marketing of Islamic (halal-certified) products in an emerging economy. Specifically, it contributes to the limited literature on frontline personnel development—such as Sales Promotion Girls (SPGs)—by highlighting how value-driven knowledge sharing and Sharia-aligned training practices enhance communication and sales effectiveness. This contextualized contribution bridges gaps in Islamic marketing literature, where most studies focus on consumer behavior or branding, rather than internal HRD mechanisms supporting faith-based marketing implementation.

Marketing strategy of Saruhan packaged sambal MSME in Bandung, Indonesia: Some notes from Islamic perspective‎

2025-09-19T04:16:43+00:00

Introduction
Packaged sambal has evolved from a traditional Indonesian condiment into a commercially viable product, driven by increasing demand for convenience, authenticity, and cultural identity. Micro, small, and medium enterprises in this sector face intense competition from established brands, resource constraints, and shifting consumer behaviors, particularly among Generation Z. Halal certification and Islamic marketing principles are increasingly recognized as strategic tools for building trust and competitive advantage.
Objectives
This study examines the marketing strategies of a Bandung-based packaged sambal enterprise, integrating market size analysis, segmentation–targeting–positioning, the marketing mix, and Islamic marketing principles. It aims to assess how these combined strategies influence sales growth, market penetration, customer loyalty, and competitive positioning.
Method
A qualitative, single-case study design was applied, using purposive sampling to select internal stakeholders and customers as participants. Data were collected through semi-structured interviews, observations, and documentation, and analyzed using thematic coding in NVivo 12 Plus. The analysis focused on market potential estimation through TAM–SAM–SOM, STP implementation, the 4Ps, and the integration of Islamic marketing practices.
Results
Findings indicate that precise market sizing, a Generation Z-focused STP strategy, a coherent marketing mix, and strong digital-first promotion significantly increased monthly sales over six months. Halal certification reinforced consumer trust, strengthened brand loyalty, and enhanced differentiation. Digital platforms, influencer collaborations, and culturally authentic storytelling proved effective in aligning with consumer values and preferences.
Implications
The study provides theoretical support for integrating cultural authenticity, ethical branding, and digital-first strategies in MSME marketing. Practically, it offers a replicable model for small enterprises seeking competitive advantage in culturally rooted food sectors. Policy implications include the need for supportive certification processes and digital literacy programs to empower MSMEs.
Originality/Novelty
This study contributes to the literature by presenting an integrated framework that combines market analysis, consumer behavior alignment, and Islamic marketing principles, demonstrating their synergistic impact on MSME performance in the halal and culturally authentic packaged food market.

Sentiment analysis of cash waqf using the SentiStrength lexicon-based approach

2025-09-19T04:16:46+00:00

Introduction
Cash waqf is getting popular due to its potential contribution to support socio-economic initiatives as well as its flexibility for donors to participate. Despite this, criticisms surrounding cash waqf are also increasing as the sector continues to expand, which might adversely affect sentiment among future donors.
Objectives
This study aims to analyze sentiments and perceptions towards cash waqf and subsequently identify specific factors affecting public perceptions toward cash waqf.
Method
A total of 242 Scopus-indexed scholarly publications related to cash waqf (1979–2025) were analyzed using the sentiment analysis model: the lexicon-based tool SentiStrength. Sentiment distribution, consistency, and model performance were compared to provide a comprehensive interpretation.
Results
The findings indicate that neutral sentiment is the highest, with a percentage of 46%, followed by positive sentiment at 34% and negative sentiment at 20%. The positive sentiments include the permissibility of cash waqf from the Islamic perspective by Imam Zufar, the potential of cash waqf to enhance the productivity of immovable waqf assets, an innovative instrument for socio-economic development, the significant role of cash waqf in economic development, and the flexible use of cash waqf to support business ecosystems in diverse sectors. On the other hand, several negative sentiments towards cash waqf cover debates about the impermanence of money as an object of waqf, suboptimal performance of trustees (nazir), relatively low societal awareness and literacy, a mismatch between its potential and the realization, the utilization of cash waqf mostly for religious and social activities (not in productive sectors that may generate income), lack of standardized reporting for cash waqf management, and lack of transparency in reporting to the public.
Implications
The findings urge policymakers to tackle the negative sentiments by improving governance, enhancing public awareness, strengthening institutional management of cash waqf, and addressing transparency issues. By addressing these issues, growth of the waqf sector can be further enhanced and accelerated due to increased public trust and participation in cash waqf.
Originality/Novelty
This study offers a novel contribution to Islamic social finance research by applying sentiment analysis to a corpus of 242 Scopus-indexed academic articles focused on cash waqf. While previous studies have extensively explored the legal, operational, and financial dimensions of cash waqf, limited attention has been given to how this topic is framed and evaluated in scholarly discourse. By employing SentiStrength, a lexicon-based sentiment classification tool, this research identifies underlying positive and negative sentiment patterns within academic narratives, thereby uncovering dominant perceptions and concerns around cash waqf implementation.

Why do they avoid it? Factors behind brand avoidance related to the Boycott, Divestment, and Sanctions (BDS) Movement‎

2025-09-19T04:16:38+00:00

Introduction
The escalation of the Israel–Palestine conflict in late 2023, coupled with a religious decree in Indonesia prohibiting the purchase of products affiliated with Israel, has intensified consumer-driven avoidance of certain brands. Unlike organized boycotts, brand avoidance reflects individual decisions rooted in moral, ideological, and emotional considerations. In this politically sensitive context, the Boycott, Divestment, and Sanctions movement has amplified public calls to reject brands linked to perceived human rights violations.
Objectives
This study aims to examine the antecedents of brand avoidance among Indonesian consumers toward brands perceived to support Israel, focusing on the roles of ideological incompatibility, undesired self-congruence, social influence, and negative word of mouth, with negative emotion as a mediating variable.
Method
The research employed a quantitative approach using an online survey of 260 Indonesian respondents aged 17 years and above, selected through purposive sampling. Data were analyzed using Partial Least Squares Structural Equation Modeling to assess measurement validity, reliability, and the strength of hypothesized relationships.
Results
All proposed hypotheses were supported. Negative word of mouth was the most influential factor in generating negative emotions, followed by undesired self-congruence, ideological incompatibility, and social influence. Negative emotions—such as anger, moral discomfort, and disappointment—were found to significantly predict brand avoidance, explaining 37.4% of its variance. The predictors collectively explained 44.7% of the variance in negative emotions, indicating moderate explanatory power.
Implications
The findings highlight the critical role of emotional responses in transforming ideological and social triggers into active brand avoidance. For brand managers, maintaining value alignment, monitoring public discourse, and engaging in transparent, ethically responsible practices are essential to mitigate reputational risks in socio-political controversies.
Originality/Novelty
This study advances understanding of brand avoidance by clarifying the mediating role of negative emotions in politically and ethically charged contexts. It provides empirical evidence from Indonesia, a Muslim-majority market, demonstrating how moral identity, social pressures, and public communication shape consumer rejection of brands tied to contentious global issues.

Why do bank risks affect stock returns? Examining the mediating role of profitability in Indonesia’s tier-1 banks‎

2025-09-20T11:25:31+00:00

Introduction
Small-scale Indonesian banks face intense challenges following the implementation of the ASEAN Economic Community and domestic capital requirements. While profitability is shaped by credit risk, operational efficiency, and capital adequacy, the translation of these internal factors into stock returns remains uncertain. Islamic banks, with their unique risk-sharing principles, offer a distinct context for evaluating this relationship.
Objectives
This study investigates whether credit risk, operational efficiency, capital adequacy, and net interest margins influence stock returns in small Indonesian banks, and whether profitability, measured by return on assets, mediates this relationship within the framework of Islamic banking principles.
Method
The research applies a quantitative panel analysis of 15 listed small-scale Indonesian banks from 2014 to 2022. Financial and market data were drawn from official regulatory and market reports. Feasible generalized least squares with panel-corrected standard errors, alongside trimming and winsorization techniques, were employed to address heteroskedasticity, autocorrelation, and outliers.
Results
The findings demonstrate that credit risk and operational inefficiency reduce profitability, while net interest margins increase it. Capital adequacy shows no significant impact on profitability. However, none of these factors, including profitability itself, significantly explain stock returns, which appear dominated by external drivers such as macroeconomic variables and investor sentiment. Profitability does not mediate the relationship between risk factors and stock performance.
Implications
The results highlight a disconnection between internal performance measures and market outcomes in small Islamic banks. For theory, the study challenges conventional risk-return models by emphasizing institutional and behavioral factors. For practice and policy, the findings underline the need for improved risk management, operational efficiency, transparency, and investor education to strengthen the link between profitability and shareholder value.
Originality/Novelty
This study contributes to the literature by integrating risk-return analysis with the specific context of Islamic banking. It shows how profitability drivers in small banks do not automatically translate into equity market performance, underscoring the importance of governance, Shariah compliance, and investor sentiment in shaping financial sustainability.

Sustainability analysis of the palm sugar industry in Hulu Sungai Tengah Regency: Perspectives on local economy, public policy, and labor law‎

2025-09-21T23:23:33+00:00

Introduction
The palm sugar industry in Hulu Sungai Tengah, South Kalimantan, is a traditional sector that supports the local economy and provides employment in the informal workforce. Despite its cultural and economic significance, the industry faces serious challenges, including unstable raw material supply, limited innovation, weak market access, and the absence of legal protection for workers. These issues raise critical questions regarding the long-term sustainability of this local industry.
Objectives
This study aims to analyze the sustainability of the palm sugar industry in Hulu Sungai Tengah from the perspectives of local economic development, public policy, and labor law, while also integrating insights from Islamic economics and finance to propose a holistic framework for industry revitalization.
Method
This research applies a qualitative descriptive-exploratory approach involving in-depth interviews, field observations, and document analysis. The participants consist of palm sugar artisans, policymakers, small and medium enterprise representatives, and local government officials. Data were examined using a triangulation technique to ensure validity, and the Triple Bottom Line framework guided the analysis.
Results
The findings reveal that the palm sugar industry retains strong economic potential due to naturally growing sugar palms and established cultural practices. However, systemic challenges persist, including lack of planned cultivation, reliance on traditional processing methods, weak branding, and widespread informality in labor practices. Islamic finance mechanisms such as profit-and-loss sharing, as well as instruments like zakat and waqf, offer promising pathways to strengthen capital access, innovation, and social welfare within the sector.
Implications
The study highlights the need for integrated policies between local government, financial institutions, and community stakeholders. Practical recommendations include cultivating sugar palms systematically, introducing innovation and digital marketing, providing fair labor protection, and mobilizing Islamic social finance. These steps can enhance resilience, competitiveness, and sustainability in line with both national development priorities and Islamic economic principles.
Originality/Novelty
This study contributes a multidisciplinary perspective by linking local economic analysis, public policy, labor law, and Islamic finance in the context of a traditional industry. It offers a novel framework for understanding how ethical and Shariah-compliant economic instruments can support the sustainable transformation of rural industries, an area that has received limited scholarly attention in South Kalimantan.

Reciprocity and the values of maqasid sharia among Muslim transmigrant farmers from Java in strengthening agricultural economics

2025-09-26T12:06:14+00:00

Introduction
The transmigration phenomenon has created new communities in various regions of Indonesia, including the transmigrant Muslim farming community from Central Java in South Sumatra. Facing the social and economic challenges of their new location, these farmers not only utilize their agricultural skills but also develop unique social relationships, such as reciprocity. As Muslims, Islamic values play a crucial role in the lives of farmers, including how they conduct their economic activities. The Maqasid sharia (objectives of sharia) , which encompass the protection of religion ( din ), life ( nafs ), intellect ( aql ), descendants ( nasl ), and property ( mal ), serve as the moral foundation for agricultural activities and social life.
Objectives
This study aims to examine how transmigrant Muslim farmers from Central Java apply the practice of reciprocity and the values of maqasid sharia in their daily lives, particularly in agriculture.
Method
This study uses a qualitative approach with a reciprocity approach and the values of maqasid sharia . Data collection was conducted through six months of fieldwork using participant observation and in-depth interviews . Interview ). Data analysis used three analysis models: domain analysis, componential analysis, and data analysis with triangulation. This is used to obtain the correct interpretation. Truth is the foundation that a researcher needs to understand.
Results
The research results show that the practice of reciprocity is an important part of the social and economic life of transmigrant Muslim farmers from Central Java. Some of the most common forms of reciprocity include mutual assistance during planting and harvesting, sharing agricultural produce, and exchanging tools and labor. These methods not only enhance social solidarity but also serve as collective economic strategies to overcome limitations in capital and access to resources. Furthermore, farmers' economic actions and decisions have been indirectly influenced by the principles of maqasid sharia . Thrift, honesty in trade, and fair management of agricultural produce are examples of the value of safeguarding wealth ( hifz). al -mal). The focus on children's education and family welfare shows the principle of protecting the soul and offspring.
Implications
The maqasid sharia and reciprocity values helped empower transmigrant Muslim farmers from Java, whose implementation of reciprocity and maqasid sharia values led to improved agricultural economics. While reciprocity creates social solidarity that helps farmers, maqasid sharia ensures economic justice by providing fair distribution of profits and avoiding usury (riba).
Originality/Novelty
This study contributes to the growing literature on Islamic business practices by highlighting the strategies and ethical considerations unique to the Muslim fashion industry. It offers insights into how businesses can balance innovation and tradition to foster sustainable growth.

The Role of economic education in optimizing local resource potential to increase community income‎

2025-09-30T11:33:46+00:00

Introduction
Economic education plays a crucial role in empowering communities to recognize and manage the potential of local resources. In the of increasing global competitiveness, local resources are often overlooked, though they possess strategic value for community-based development. When aligned with Sharia entrepreneurial principles, the optimization of local resources can contribute not only to income growth but also to ethical and sustainable economic practices.
Objectives
This study aims to explore the role of economic education in promoting Sharia-based entrepreneurship for optimizing local resource potential. Specifically, it investigates how economic education affects economic literacy and business diversification, and how it contributes to increasing community income.
Method
The research employed a mixed-methods approach, combining quantitative and qualitative data to provide a comprehensive analysis. Quantitative data were collected via a structured survey involving 300 respondents, while qualitative insights were obtained through in-depth interviews with 15 selected participants. Artificial Intelligence (AI) tools were used to assist in refining and analyzing the content for clarity and coherence.
Results
The findings reveal that economic education significantly enhances economic literacy, as shown by an increase in literacy scores from 3.1 to 4.3. Moreover, 40% of respondents diversified their businesses after participating in the training—primarily into value-added agricultural products and tourism services. Interview data also highlight a shift in mindset, with communities beginning to focus on the development and management of local resources rather than merely utilizing them in traditional ways.
Implications
The study underscores the importance of practice-based economic education programs that incorporate technology and uphold Sharia principles. Effective collaboration among government institutions, private sectors, and educational bodies is essential to support infrastructure and funding for sustainable impact.
Originality/Novelty
This study uniquely combines the perspectives of economic education and Sharia entrepreneurship in the context of local resource optimization, an approach that has rarely been addressed in previous empirical studies. It also integrates AI-assisted analysis for enhanced validity and relevance in community development frameworks.

Transformation of the halal food industry in Bali Province: Evaluation of the effectiveness of halal labeling systems on local economic growth‎

2025-10-02T14:11:22+00:00

Introduction
Halal tourism has become a strategic priority in Indonesia, positioning the country as a global leader in the halal economy. Bali, a Hindu-majority region with unique cultural identity, faces the dual challenge of accommodating rising demand for halal-certified products from Muslim tourists while preserving local traditions. The effectiveness of halal labeling in this context is not only a matter of consumer assurance but also of industry transformation and economic development.
Objectives
This study aims to analyze the effectiveness of the halal labeling system in driving the transformation of the halal food industry in Bali. It examines the role of halal labeling in product innovation, process improvement, marketing expansion, and institutional strengthening, and assesses its broader contribution to regional economic growth.
Method
The research uses a qualitative document analysis approach, synthesizing laws, policy frameworks, certification data, statistical records, and comparative international experiences. The analysis applies an endogenous growth perspective to evaluate how halal labeling functions as a catalyst for innovation, industry upgrading, and competitiveness in Bali’s halal food sector.
Results
The findings reveal that halal labeling encourages significant transformation. Products are reformulated to meet halal requirements without diminishing cultural authenticity. Processes are upgraded through assurance systems, training, and quality management. Marketing strategies expand into Muslim-friendly branding and digital promotion, increasing access to international markets. Institutions are strengthened through the establishment of halal centers and multi-stakeholder collaboration. Data indicate that the number of halal-certified businesses in Bali increased nearly twentyfold between 2020 and 2024, though only about ten percent of micro, small, and medium enterprises are certified. The contribution of Muslim tourists to Bali’s tourism revenue also grew substantially during this period.
Implications
The study demonstrates that halal labeling operates as an effective instrument of structural change in a non-Muslim context when implemented with cultural sensitivity, institutional support, and facilitation for small enterprises. By fostering product upgrading, market diversification, and tourism competitiveness, halal labeling contributes to Bali’s economic recovery and sustainable growth.
Originality/Novelty
This study extends the discourse on halal labeling by reframing it from a narrow assurance mechanism into a driver of structural transformation. It integrates Islamic ethical foundations, international comparative experiences, and endogenous growth theory to propose a context-sensitive model for implementing halal labeling in minority-Muslim destinations.

Firm fundamentals and sectoral heterogeneity in Sharia-compliant stock return volatility: Evidence from Indonesia‎

2025-09-30T11:33:44+00:00

Introduction
The volatility of stock returns in Islamic equity markets is a critical concern for both investors and policymakers. Islamic screening principles restrict excessive leverage and speculative activities, potentially shaping volatility in distinct ways compared to conventional markets. Understanding how firm fundamentals affect volatility within the Indonesia Sharia Stock Index is essential for evaluating the stability and competitiveness of Islamic capital markets.
Objectives
This study aims to examine whether firm fundamentals, i.e. profitability, liquidity, leverage, size, growth, and asset turnover, systematically influence stock return volatility in Sharia‐compliant firms. It also seeks to identify cross‐sector heterogeneity in these relationships, highlighting whether specific industries are more sensitive to fundamental determinants of volatility.
Method
The research employs a quantitative design using a panel of 200 nonfinancial firms listed in the Indonesia Sharia Stock Index over the 2019–2023 period. Approximately 4,000 firm–quarter observations were analyzed. Volatility was modeled through panel generalized autoregressive conditional heteroskedasticity estimation, while Chow, Wald, and likelihood ratio tests were applied to assess sectoral heterogeneity. The study incorporated firm fundamentals as independent variables with sector‐specific models to capture industry differences.
Results
The findings reveal that profitability and liquidity significantly reduce stock return volatility, while leverage consistently increases it. Firm size emerges as the most powerful stabilizer, growth contributes to higher volatility, and asset turnover lowers volatility. The magnitude of these effects varies across industries: Energy and Basic Materials show the strongest sensitivity to fundamental shocks, while Utilities and Healthcare display weaker responses. Statistical tests confirm substantial cross‐sector heterogeneity in the relationship between fundamentals and volatility.
Implications
The results demonstrate that Islamic screening principles, particularly restrictions on leverage, effectively mitigate excessive risk in Sharia markets. The study reinforces the relevance of Modern Portfolio Theory and Arbitrage Pricing Theory in Islamic settings while emphasizing the need for sector‐sensitive investment strategies. Portfolio managers and regulators may use these insights to refine risk management practices and enhance the resilience of Islamic equity markets.
Originality/Novelty
This study offers a novel application of panel GARCH modeling to explore cross‐sectoral heterogeneity in an Islamic equity universe. It contributes empirical evidence that firm fundamentals significantly and differentially shape volatility across industries, thereby advancing both Islamic finance scholarship and practical portfolio construction in Sharia‐compliant markets.

Modeling the mediating role of trust in halal cosmetics: Evidence from MS Glow consumers in Palopo City‎

2025-10-09T09:36:23+00:00

Introduction
The halal cosmetics industry in Indonesia is experiencing significant growth, driven by increasing consumer awareness of sharia compliance, safety, and ethical values. Yet, empirical studies on how halalness, service quality, and price interact with consumer trust and satisfaction remain limited, particularly in non-metropolitan contexts such as Palopo City, Indonesia.
Objectives
This study aims to analyze the influence of product halalness, service quality, and price on consumer satisfaction of MS Glow cosmetics in Palopo City, with consumer trust examined as a mediating variable.
Method
The research employed a quantitative approach using a structured questionnaire distributed to 163 MS Glow users aged 18–45 years in Palopo. Data were analyzed through Structural Equation Modeling with the Partial Least Squares technique. Measurement validity and reliability were assessed using factor loadings, average variance extracted, and reliability indices.
Results
The findings demonstrate that halalness, service quality, and price all have significant positive effects on consumer trust, while trust itself strongly enhances satisfaction. Furthermore, trust mediates the relationship between the three antecedents and consumer satisfaction. Among the predictors, halalness is the strongest determinant of trust, underscoring its central role in shaping consumer evaluations in a Muslim-majority context.
Implications
The study highlights the strategic importance of building trust through transparent halal assurance, consistent service performance, and fair pricing. These factors collectively enhance consumer satisfaction and provide actionable insights for managers in the halal cosmetics sector.
Originality/Novelty
This research contributes by extending the study of halal marketing into a non-metropolitan Indonesian setting and by clarifying the mediating role of trust. It enriches the literature by empirically establishing that halalness, beyond price and service quality, is the most influential driver of consumer trust and satisfaction in halal cosmetics.

The impact of zakat, infak, and sedekah funds, life expectancy, and average length of schooling on poverty mediated by economic growth in Indonesia

2025-10-09T09:36:20+00:00

Introduction
Despite Indonesia’s commitment to poverty alleviation through human development and Islamic social finance, regional poverty disparities persist. While life expectancy and education have been widely studied, the effectiveness of zakat, infak, and sedekah in reducing poverty remains underexplored in empirical development research.
Objectives
This study investigates the effects of zakat, infak, and sedekah (ZIS), life expectancy, and the average length of schooling on poverty in Indonesia’s provinces, while assessing the mediating role of economic growth in these relationships.
Method
A quantitative panel data approach was employed using secondary data from 33 Indonesian provinces spanning 2019 to 2023. Panel regression models were estimated with EViews to examine direct and indirect effects among variables and test mediation through economic growth.
Results
The findings reveal that life expectancy significantly reduces poverty both directly and through economic growth. Economic growth also independently contributes to lowering poverty levels. However, the distribution of ZIS showed no significant influence on poverty, suggesting institutional or structural limitations. Unexpectedly, average years of schooling were positively correlated with poverty, indicating possible mismatches between educational attainment and labor market demands.
Implications
The results underscore the need to improve the governance and strategic alignment of Islamic social finance with regional development. They also highlight the importance of shifting education policy from quantity to quality and ensuring inclusive, health-driven economic growth.
Originality/Novelty
This study integrates Islamic social finance and human capital within a poverty reduction model, offering new empirical insights into the pathways through which social and economic variables interact in Indonesia’s development context.

Modeling technology and profitability as moderators of competition, efficiency, and risk in Islamic bank stability

2025-10-09T09:36:18+00:00

Introduction
Islamic commercial banks in Southeast Asia are facing growing challenges as competition intensifies and digital transformation accelerates. Stability has become a central concern, particularly in Indonesia and Malaysia where Islamic finance holds significant market share. While prior studies highlight competition, efficiency, credit risk, and liquidity risk as determinants of financial stability, the moderating influence of technology adoption and profitability has been less explored.
Objectives
This study investigates the effects of competition, efficiency, credit risk, and liquidity risk on the stability of Islamic commercial banks in Indonesia and Malaysia. It further examines how technology and profitability moderate these relationships, offering a comprehensive understanding of their role in shaping bank resilience.
Method
The research employed a quantitative approach using panel data from 14 Islamic commercial banks between 2010 and 2022. Bank stability was measured with the Z-Score, competition with the Lerner Index, efficiency with operating costs, and credit and liquidity risks with respective ratios. Technology was proxied by non-interest expenditures, while profitability was measured by return on assets. The analysis applied the generalized method of moments to address endogeneity and ensure robust estimates.
Results
The findings reveal that competition enhances bank stability, while credit and liquidity risks undermine it. Efficiency does not significantly affect stability. Technology exerts a dual effect: it improves stability directly but weakens the stabilizing influence of competition and heightens vulnerabilities linked to liquidity risk. Similarly, profitability supports stability under moderate risk-taking but magnifies the negative effects of excessive credit and liquidity risks. Bank size strengthens stability, whereas bank age is associated with greater fragility.
Implications
These results highlight that technology and profitability are double-edged factors: they can either reinforce or erode financial stability depending on how banks align them with risk management practices. Regulators and managers must ensure that digitalization and profit strategies are embedded within disciplined governance frameworks to prevent systemic vulnerabilities.
Originality/Novelty
This study contributes to the Islamic banking literature by introducing technology and profitability as moderators in the stability model, using a cross-country dataset and advanced estimation techniques. It offers new insights for policymakers and practitioners on balancing growth, digitalization, and risk control in sustaining the resilience of Islamic commercial banks.

Evaluating the effectiveness of social assistance programs for poverty reduction: Evidence from Baramamase Village, Indonesia

2025-07-12T01:02:24+00:00

Introduction
Indonesia continues to face the challenge of multidimensional poverty despite multiple government initiatives. Social assistance programs such as food aid, conditional cash transfers, health insurance subsidies, and direct village fund transfers have been implemented nationwide. However, concerns about mistargeting, weak management, and limited long-term impact persist. This study examines the implementation and effectiveness of social assistance in Baramamase Village to understand how these programs contribute to welfare improvement at the local level.
Objectives
The study aims to evaluate whether the design and implementation of social assistance programs in the village achieve their intended goals, to identify the factors that influence their effectiveness, and to assess the extent to which they improve household welfare beyond short-term relief.
Method
A qualitative descriptive method was employed using observation, interviews with program implementers and beneficiaries, and documentation. Data were analyzed using the Context, Input, Process, and Product (CIPP) framework to capture institutional settings, resources, implementation mechanisms, and welfare outcomes. NVivo software was used to organize and analyze interview data.
Results
The findings reveal that program effectiveness depends heavily on local governance, accurate data, and active community participation. Health insurance subsidies show the most consistent positive impact on welfare protection and sustainability, while conditional cash transfers improve education and health outcomes for children. Food aid contributes to short-term consumption but offers limited long-term benefits, and village fund cash transfers are valued by recipients but face distributional challenges. Beneficiaries report immediate relief and satisfaction, yet also express concerns about adequacy and continuity.
Implications
The results suggest that social assistance plays a vital role in protecting poor households from shocks and ensuring access to basic needs. Nevertheless, its transformative effect on long-term welfare is constrained without complementary empowerment strategies. Policy improvements are needed in data accuracy, transparency, inter-institutional coordination, and the integration of skill-building and livelihood support to reduce dependency.
Originality/Novelty
This study provides a localized and comprehensive assessment of social assistance effectiveness using the CIPP evaluation framework. By highlighting the interplay between management quality, data integrity, and beneficiary participation, it contributes to policy discourse on how to transform social assistance from temporary relief into a sustainable path toward welfare enhancement.

Unlocking idle waqf assets through institutionalized pentahelix collaboration: Evidence from North Sumatra, Indonesia

2025-07-18T23:18:03+00:00

Introduction
Waqf, an Islamic endowment intended for perpetual public benefit, remains one of the least-leveraged instruments of regional development in Indonesia. In North Sumatra a large share of endowed land is legally uncertified and economically idle, reflecting weak managerial capacity and fragmented multi-stakeholder coordination.
Objectives
This study investigates whether an institutionalized Pentahelix governance framework, uniting academia, business, community, government, and media, can transform dormant waqf assets into productive ventures that advance sustainable socio-economic goals.
Method
A sequential-exploratory case-study design combined forty semi-structured interviews, extended participatory observation in five waqf institutions, and systematic document analysis of legal records, financial reports, and policy papers. Data were coded thematically using Miles and Huberman’s interactive model, displayed in cross-stakeholder matrices, and triangulated to strengthen analytic credibility.
Results
Five mutually reinforcing bottlenecks emerged: limited public literacy, low professional competence among nazhir (waqf managers), protracted land-title certification, the absence of an integrated digital registry, and ad-hoc stakeholder collaboration. Universities and government agencies show relative engagement, whereas businesses and media remain peripheral, leaving community actors to operate in isolation. A five-lever blueprint, regional synergy forum, professional certification pathways, province-wide digital ledger, targeted fiscal incentives for corporate waqf, and sustained media literacy campaigns, offers an actionable route to align legal certainty, data transparency, and participatory governance.
Implications
Implementing the proposed blueprint would unlock latent economic value, strengthen public trust, and align North Sumatra’s waqf sector with national Islamic-finance reforms and the United Nations Sustainable Development Goals. The model balances religious legitimacy with market discipline, demonstrating how social-justice mandates can coexist with competitive financial performance.
Originality/Novelty
By integrating “hard” infrastructural prerequisites, secure certification and digital systems, with “soft” relational capital generated through Pentahelix collaboration, the research extends existing theory and supplies a replicable governance template for Islamic social finance.