Main Article Content
Abstract
This study aims to examine the effect of Islamic banking financing in helping poor people. Panel data starts from 2014q1-2018q2 collected from six countries were used in this study. The analysis method used is the panel data analysis. Private consumption expenditure is used to measure the level of poverty. Total Shariah- Compliant Financing is used to measure Islamic banking financing value. Several control variables are involved, such as conventional bank credit, consumer price index and economic growth. The result showed that Islamic banking financing has an effect in reducing the level of poverty better than conventional banking in these countries.
Keyword: Islamic Banking, Poverty, Financing
Article Details
References
- Ang, James, B. (2010). Finance and inequality: the case of India. Southern Economic Journal, 76, 738–761.
- Bashir, Abdel-Hameed M. (2018) Reducing Poverty and Income Inequalities: Current Approaches and Islamic Perspective. Journal of King Abdulaziz University: Islamic Economics, Vol. 31, No. 1, 2018.
- Beck, T., Demirguc-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor. Journal of Economic Growth. https://doi.org/10.1007/s10887-007-9010-6.
- Bittencourt, M. (2010). Financial development and inequality: Brazil 1985-1994. Economic Change and Restructuring. https://doi.org/10.1007/s10644-009-9080.
- Chapra, M. U. (1996). Moneraty Management in An Islamic Economy. Islamic Economic Studied.
- Darrat, A. F. (1988). The Islamic interest-free banking system: Some empirical evidence. Applied Economics. https://doi.org/10.1080/00036848800000054.
- Dewi, S., Abd Majid, M. S., Aliasuddin, & Kassim, S. (2018). Dynamics of Financial Development, Economic Growth, and Poverty Alleviation: The Indonesian Experience. South East European Journal of Economics and Business. https://doi.org/10.2478/jeb-2018- 0002.
- Dong-Hyeon Kim, Shu-Chin Lin. (2013). Nonlinearity in the financial development–income inequality nexus. Journal of Comparative Economics, Volume 39, Issue 3, Pages 310-325, ISSN 0147-5967, https://doi.org/10.1016/j.jce.2011.07.002.
- Donou-Adonsou, F., & Sylwester, K. (2016). Financial development and poverty reduction in developing countries: New evidence from banks and microfinance institutions. Review of Development Finance. https://doi.org/10.1016/j.rdf.2016.06.002
- El-Galfy, Ahmed & Khiyar, Khiyar. (2012). Islamic Banking And Economic Growth: A Review. Journal of Applied Business Research. 28. 943956.10.19030/jabr.v28i5.7236.
- Furqani, H., & Mulyany, R. (2009). Islamic banking and economic growth: Empirical evidence from Malaysia. Journal of Economic Cooperation and Development.
- Galor, O., & Moav, O. (2004). From physical to human capital accumulation: Inequality and the process of development. Review of Economic Studies. https://doi.org/10.1111/0034- 6527.00312.
- Guillaumont Jeanneney, Sylviane and Kpodar, Kangni, Financial Development and Poverty Reduction: Can There be a Benefit Without a Cost? (March 2008). IMF Working Papers, pp. 1-36, 2008. Available at SSRN: https://ssrn.com/abstract=1112204.
- Ho, S.-Y., & Odhiambo, N. M. (2016). Finance And Poverty Reduction In China: An Empirical Investigation. International Business & Economics Research Journal (IBER). https://doi.org/10.19030/iber.v10i8.5382.
- Jeanneney, S. G., & Kpodar, K. (2011). Financial development and poverty reduction: Can there be a benefit without a cost? Journal of Development Studies. https://doi.org/10.1080/00220388.2010.506918.
- Kim, D. H., & Lin, S. C. (2011). Nonlinearity in the financial development-income inequality nexus. Journal of Comparative Economics. https://doi.org/10.1016/j.jce.2011.07.002.
- Kuznet, S. (1955). Growth and Income Inequality. The American Economic Review.
- Law, Siong Hook, & Tan, H. B. (2009). the Role of Financial Development on Income Inequality in Malaysia. Journal of Economic Development. https://doi.org/10.1007/s10552-011-9838-0.
- Levine, R., Loayza, N., & Beck, T. (2000). Financial intermediation and growth: Causality and causes. Journal of Monetary Economics. https://doi.org/10.1016/S0304-3932(00)00017-9.
- Merton, R. C., & Bodie, Z. (1995). A Conceptual Framework for Analyzing the Financial Environment. In The Global Financial System: A Functional Perspective. https://doi.org/10.2139/ssrn.6638.
- Mosab I., & Tabash, R. S. D. (2011). Islamic Banking and Economic Growth: An Empirical Evidence from Qatar. Journal of Physics A: Mathematical and Theoretical. https://doi.org/10.1088/1751-8113/44/8/085201.
- Poliduts, A., & Kapkaev, Y. (2015). Economic Growth : Types and Factors. International Conference on Eurasian Economies.
- Rajan, R. G., & Zingales, L. (2003). The great reversals: The politics of financial development in the twentieth century. Journal of Financial Economics. https://doi.org/10.1016/S0304-405X(03)00125-9.
- Schumpeter, J.A. (1911). The theory of economic development; an inquiry intoprofits, capital, credit, interest, and the business cycle, translated by Opie, R. Harvard University Press, Cambridge, p. 1934.
- Setiawan, I. (2017). Role of Islamic Banking and Conventional Against Poverty with The Dual Banking System. MIMBAR, Jurnal Sosial Dan Pembangunan. https://doi.org/10.29313/mimbar.v32i2.1916.
- Seven, U., & Coskun, Y. (2016). Does financial development reduce income inequality and poverty? Evidence from emerging countries. Emerging Markets Review. https://doi.org/10.1016/j.ememar.2016.02.002.
- Sinnathurai, V. (2013). An Empirical Study on the Nexus of Poverty, GDP Growth, Dependency Ratio and Employment in Developing Countries. Journal of Competitiveness. https://doi.org/10.7441/joc.2013.02.05.
- Wilson, C. (1979). An infinite horizon model with money. In: Green, J.R., Scheinkman, J.A. (Eds.), General Equilibrium, Growth, and Trade: Essays in Honor of Lionel McKenzie. Academic Press, New York, NY.
- Zhang, Q., & Chen, R. (2015). Financial development and income inequality in China: An application of SVAR approach. Procedia Computer Science. https://doi.org/10.1016/j.procs.2015.07.159.
References
Ang, James, B. (2010). Finance and inequality: the case of India. Southern Economic Journal, 76, 738–761.
Bashir, Abdel-Hameed M. (2018) Reducing Poverty and Income Inequalities: Current Approaches and Islamic Perspective. Journal of King Abdulaziz University: Islamic Economics, Vol. 31, No. 1, 2018.
Beck, T., Demirguc-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor. Journal of Economic Growth. https://doi.org/10.1007/s10887-007-9010-6.
Bittencourt, M. (2010). Financial development and inequality: Brazil 1985-1994. Economic Change and Restructuring. https://doi.org/10.1007/s10644-009-9080.
Chapra, M. U. (1996). Moneraty Management in An Islamic Economy. Islamic Economic Studied.
Darrat, A. F. (1988). The Islamic interest-free banking system: Some empirical evidence. Applied Economics. https://doi.org/10.1080/00036848800000054.
Dewi, S., Abd Majid, M. S., Aliasuddin, & Kassim, S. (2018). Dynamics of Financial Development, Economic Growth, and Poverty Alleviation: The Indonesian Experience. South East European Journal of Economics and Business. https://doi.org/10.2478/jeb-2018- 0002.
Dong-Hyeon Kim, Shu-Chin Lin. (2013). Nonlinearity in the financial development–income inequality nexus. Journal of Comparative Economics, Volume 39, Issue 3, Pages 310-325, ISSN 0147-5967, https://doi.org/10.1016/j.jce.2011.07.002.
Donou-Adonsou, F., & Sylwester, K. (2016). Financial development and poverty reduction in developing countries: New evidence from banks and microfinance institutions. Review of Development Finance. https://doi.org/10.1016/j.rdf.2016.06.002
El-Galfy, Ahmed & Khiyar, Khiyar. (2012). Islamic Banking And Economic Growth: A Review. Journal of Applied Business Research. 28. 943956.10.19030/jabr.v28i5.7236.
Furqani, H., & Mulyany, R. (2009). Islamic banking and economic growth: Empirical evidence from Malaysia. Journal of Economic Cooperation and Development.
Galor, O., & Moav, O. (2004). From physical to human capital accumulation: Inequality and the process of development. Review of Economic Studies. https://doi.org/10.1111/0034- 6527.00312.
Guillaumont Jeanneney, Sylviane and Kpodar, Kangni, Financial Development and Poverty Reduction: Can There be a Benefit Without a Cost? (March 2008). IMF Working Papers, pp. 1-36, 2008. Available at SSRN: https://ssrn.com/abstract=1112204.
Ho, S.-Y., & Odhiambo, N. M. (2016). Finance And Poverty Reduction In China: An Empirical Investigation. International Business & Economics Research Journal (IBER). https://doi.org/10.19030/iber.v10i8.5382.
Jeanneney, S. G., & Kpodar, K. (2011). Financial development and poverty reduction: Can there be a benefit without a cost? Journal of Development Studies. https://doi.org/10.1080/00220388.2010.506918.
Kim, D. H., & Lin, S. C. (2011). Nonlinearity in the financial development-income inequality nexus. Journal of Comparative Economics. https://doi.org/10.1016/j.jce.2011.07.002.
Kuznet, S. (1955). Growth and Income Inequality. The American Economic Review.
Law, Siong Hook, & Tan, H. B. (2009). the Role of Financial Development on Income Inequality in Malaysia. Journal of Economic Development. https://doi.org/10.1007/s10552-011-9838-0.
Levine, R., Loayza, N., & Beck, T. (2000). Financial intermediation and growth: Causality and causes. Journal of Monetary Economics. https://doi.org/10.1016/S0304-3932(00)00017-9.
Merton, R. C., & Bodie, Z. (1995). A Conceptual Framework for Analyzing the Financial Environment. In The Global Financial System: A Functional Perspective. https://doi.org/10.2139/ssrn.6638.
Mosab I., & Tabash, R. S. D. (2011). Islamic Banking and Economic Growth: An Empirical Evidence from Qatar. Journal of Physics A: Mathematical and Theoretical. https://doi.org/10.1088/1751-8113/44/8/085201.
Poliduts, A., & Kapkaev, Y. (2015). Economic Growth : Types and Factors. International Conference on Eurasian Economies.
Rajan, R. G., & Zingales, L. (2003). The great reversals: The politics of financial development in the twentieth century. Journal of Financial Economics. https://doi.org/10.1016/S0304-405X(03)00125-9.
Schumpeter, J.A. (1911). The theory of economic development; an inquiry intoprofits, capital, credit, interest, and the business cycle, translated by Opie, R. Harvard University Press, Cambridge, p. 1934.
Setiawan, I. (2017). Role of Islamic Banking and Conventional Against Poverty with The Dual Banking System. MIMBAR, Jurnal Sosial Dan Pembangunan. https://doi.org/10.29313/mimbar.v32i2.1916.
Seven, U., & Coskun, Y. (2016). Does financial development reduce income inequality and poverty? Evidence from emerging countries. Emerging Markets Review. https://doi.org/10.1016/j.ememar.2016.02.002.
Sinnathurai, V. (2013). An Empirical Study on the Nexus of Poverty, GDP Growth, Dependency Ratio and Employment in Developing Countries. Journal of Competitiveness. https://doi.org/10.7441/joc.2013.02.05.
Wilson, C. (1979). An infinite horizon model with money. In: Green, J.R., Scheinkman, J.A. (Eds.), General Equilibrium, Growth, and Trade: Essays in Honor of Lionel McKenzie. Academic Press, New York, NY.
Zhang, Q., & Chen, R. (2015). Financial development and income inequality in China: An application of SVAR approach. Procedia Computer Science. https://doi.org/10.1016/j.procs.2015.07.159.