Organization Of Islamic Cooperation Research Articles

Financial inclusion and sustainable development of banks: the place of organization of Islamic cooperation (OIC) in emerging markets

PurposeThis study examines the impact of financial inclusion on the corporate sustainability of banks in both Organization of Islamic Cooperation (OIC) and non-OIC emerging economies, considering the COVID-19 pandemic.Design/methodology/approachThe research utilizes data from 3,159 bank-years from 2007 to 2021 across 33 emerging markets.FindingsEmpirical findings indicate that firms operating in higher financial inclusion developing countries tend to exhibit higher levels of sustainable development. This positive relationship has become even more pronounced during the COVID-19 pandemic, suggesting the importance of financial inclusion in fostering corporate sustainability, especially in times of economic challenges. Interestingly, while the positive correlation between financial inclusion and sustainable development remains consistent across both OIC and non-OIC countries, firms in OIC countries do not show significant changes during the pandemic.Practical implicationsThis observation suggests that the pandemic’s impact on corporate sustainability may vary between the two groups of countries. This study highlights the significance of financial inclusion in promoting corporate sustainability in developing economies. In times of recessions when accessing finance becomes expensive, policymakers in OIC countries should identify firms that adhere to Islamic principles, such as those sensitive to interest rates, and provide them with targeted support. This assistance can enable these companies to compete effectively and achieve their financial sustainability objectives.Originality/valueThere has been no attempt to investigate the effect of financial inclusion and the pandemic on the sustainable development of banks in developing countries.

Utilising AI-based Chatbot for Maximising Value and Profitability of Islamic Financial Institutions

global Islamic finance industry has experienced significant growth in recent years, establishing Islamic financial institutions (IFIs) as prominent players in the international financial landscape. To maintain competitiveness and sustainability, IFIs must embrace innovation and explore avenues for maximising their performance. This research aims to investigate the effect of AI-based Chatbots on the value and profitability of IFIs in Organisation of Islamic Cooperation (OIC) countries. The study has employed quantitative methodology, and the data was collected from the Bloomberg database, Thomson Reuters DataStream, World Development Indicators and annual reports of 104 IFIs across 44 OIC countries from 2020 to 2022. Employing the Generalised Method of Moments (GMM), this study investigates the impact of AI-based Chatbots on the value and profitability of IFIs. The findings show a positive impact of Chatbot on Return on Assets (ROA), Return on Equity (ROE), and Tobin’s Q (TBQ). Furthermore, the analysis reveals that variables such as Gross Domestic Product (GDP), institutional size (SIZE), and age (AGE) exhibit positive associations with the value and profitability of IFIs. Conversely, the study identifies Consumer Price Index (CPI) as exerting a negative influence on the value and profitability of IFIs, indicating potential challenges posed by inflationary pressures. IFIs may consider investing in the development and deployment of advanced AI technologies to enhance overall profitability. Keywords: AI-based Chatbot; Profitability; Islamic financial institutions (IFIs); OIC Countries; Dynamic GMM

Sustainable Investing and Islamic Finance: Evidence from the Organisation of Islamic Cooperation (OIC) Countries

Sustainable investing and Islamic finance have been two of the fastest-growing areas of finance. In Islamic finance, equity markets play an important role. In the literature on Islamic equities, there are relatively few studies that have integrated sustainability factors into Islamic finance. In this paper, our objective is to contribute to the line of research on the integration of sustainable investing into Islamic finance. To that end, we first examine the comparative performance of investing in the sustainability indices from those Organization of Islamic Cooperation (OIC) countries that are partners of the Sustainable Stock Exchanges (SSE) initiative. We then conduct a case study of Borsa Istanbul in Turkey, which has the best-performing sustainability index from OIC countries. Overall, our findings reveal the heterogeneity in sustainable investment performance, and suggest the potential of obtaining superior risk-adjusted returns in certain economies from OIC countries. This study draws implication on how sustainable investing can help bridge the gap between Islamic and conventional financial markets.

Corruption and Bank Risk‐Taking in Dual Banking Systems

ABSTRACTResearch Question/IssueWe investigate whether the risk‐taking of Islamic banks is affected differently by corruption compared to conventional banks. We also examine whether the characteristics of the Shari'ah Supervisory Board (SSB) of Islamic banks and the characteristics of the board of directors of conventional banks play an effective role in moderating such an effect.Research Findings/InsightsWe find consistent evidence that banks in countries with higher corruption have higher bank risk for both conventional and Islamic banks. However, this association is attenuated by the size of the SSB, the presence of female board members, and higher academic qualifications of SSB members. For conventional banks, the moderating effect of the presence of female directors and academically qualified members on the board of directors is also prevalent but to a lesser extent.Theoretical/Academic ImplicationsThis study contributes to the corporate finance literature more generally by highlighting the role played by corporate governance, particularly the presence of female members and academically qualified members on the SSBs of Islamic banks and on the board of directors of conventional banks, in mitigating the effect of corruption on bank risk‐taking for the two bank types.Practitioner/Policy ImplicationsOur findings are based on a matched sample of banks operating in 10 OIC (Organization of Islamic Cooperation) countries and have important implications for bank stability and bank governance reforms. On the detrimental side, urgency of the anti‐corruption campaigns in these countries is justified due to the significant effect of corruption on risk‐taking for both conventional and Islamic banks. Overall, to better fight corruption in countries with dual banking systems, there is a need to enforce stricter rules for all types of banks.

A Kingdom of Possibility

A Kingdom of Possibility

An Evaluation on Turkey’s Relations With the Organization of Islamic Cooperation and Humanitarian Aid Activities During the COVID-19 Period

Türkiye tarih boyunca insani yardım konusunda gerek yurtiçinde gerekse uluslararası platformda bulunmayı görev bilmiştir. Bu alanda güçlü bir geleneğe sahip olan, özellikle son yıllarda birçok sivil toplum kuruluşuyla birlikte sahada aktif bir şekilde var olan Türk milleti pandemi döneminde de bu çabasını istikrarlı bir şekilde sürdürmüştür. Nitel araştırma yöntemi kullanılan bu çalışmada konuyla ilgili yapılan literatür taraması sonucunda çalışma yapılacak alanı sınırlandırmak ve somut verilerin ön planda olması düşüncesiyle; Kovid-19 sürecinde Türkiye ve İİT üye ülkelerine ait sosyal sorunların baş gösterdiği durumların neler olduğu, bu durumlara karşı alınan önlemlerin neler olduğu ve yapılan uygulamaların bulunup bulunmadığı konuları araştırılmak istenmiştir. Literatürde koronavirüs döneminde insani yardım faaliyetleri üzerine yapılan çalışmalar eksiklik göstermektedir. Beklenmedik bir anda hayatımıza dahil olan Kovid-19 pandemisi boyunca sağlık araç ve gereçleri ihtiyaçları önemli bir diplomasi aracı haline dönüşmüştür. Bu diplomasiyi uluslararası yardımlar kapsamında çok iyi bir şekilde yürüten ülke tartışmasız Türkiye’dir. Özellikle Türkiye’nin İslam ülkelerinde insani yardım faaliyetlerine bu bağlamda yer verilerek katkı sağlanacaktır.

The Role of the Islamic Cooperation Organization's Charter in Promoting the Culture of Human Rights

The Organization of Islamic Cooperation (OIC) is a collective voice of the Muslim world in the modern era. It seeks to put together the efforts of Muslims, their capabilities and resources to achieve the advancement and development as well as to find a privileged position for its member States in the international arena. The organization is keen to promote and disseminate a culture of human rights amongst its Member States. 
 In this research, common aspects between the Charter of the Organization of Islamic Cooperation and the International and Regional Charters of human rights are reviewed. The articles in the charter of the Organization where concern is shown to spread a culture of peace and security at all levels as well as promotion of values like justice, equality, the right to self-determination, acquisition of knowledge, protection of environment, more empowered women and the like. The rights stated in the international and regional human rights charters are almost the same. 
 The research focuses the need to ensure sustainable co-existence and harmony through reviewing national constitutions and parameters for joint work with better regional and international cooperation through conventions like the Charter of OIC and its implementation through parliamentary,national and municipal committees.

Bank Credit and Economic Growth: Evidence from OIC Countries

This study aims to explore the impact of bank credit along with three other independent variables, namely population, employment, and inflation, on economic growth in 55 Organization of Islamic Cooperation (OIC) member countries. The data used is annual panel data from 2010 to 2021, obtained from SESRIC OIC. The analysis method applied in this study is static panel data regression. The results show that each independent variable, such as population, employment, inflation, and total bank credit, has a significant effect both simultaneously and partially on the economic growth variable (GDP). Bank credit facilitates the efficient allocation of resources from savers to borrowers who have productive investment opportunities, thereby promoting economic growth. Second, banks act as an important channel in the transmission of monetary policy by providing financial intermediation, receiving and utilizing large amounts of public funds, and creating money supply. Third, bank credit expansion is associated with higher economic growth across industries, encouraging tangible investment but not intangible investment in more debt-dependent industries.

İSLAM HUKUKU AÇISINDAN HARAM KÖKENLİ KATKILARLA ÜRETİLEN AŞILARIN MÜBAH OLMASINDA İSTIHALE VE İSTİHLAK'IN ROLÜ

The emergence of pandemics presents significant challenges to global health, economies, and societies at large. In such critical circumstances, the development and widespread adoption of effective vaccines are of utmost importance to protect lives, improve population health, and restore social and economic stability. Islamic jurisprudence, with its emphasis on the preservation of life and the wellbeing of individuals, plays a crucial role in influencing the acceptance and utilization of vaccines within societies that predominantly adhere to the Islamic faith. This article explores the role of two significant concepts in Islamic jurisprudence, namely Istihalah and Istihlak, in determining the permissibility (halal) of vaccines derived from sources that are considered haram. Focusing on materials such as animal tissues, human fetal tissues, pig gelatin, and alcohol, which may raise concerns re-garding their compliance with Islamic teachings, this article investigates the processes of transformation and purification involved in the production of such vaccines. This article provides a comprehensive analysis of the permissibility of vac- cines derived from haram sources, drawing upon a wide range of scientific opinions, fatwas (religious decrees), classical and contemporary Islamic legal texts, and scientific research. It highlights that the prevailing view among the fatwa councils and the majority of Islamic scholars is that such vaccines are considered halal (permissible). Extensive research demonstrates that the 57 member countries of the Organization of Islamic Cooperation (OIC) exhibit a strong commitment to combating infectious diseases through the prioritized utilization of vaccines. Again, this article adopts a multidisciplinary approach encompassing scientific knowledge, bioethics, and Islamic jurisprudence to elucidate the alignment of vac cination methods with Islamic principles. The principal aim of this study is to enhance the informed decision-making process for healthcare professionals, policy-makers, and religious leaders by furnishing them with invaluable insights.

Efficiency of SDG Achievement in Muslim Countries

The United Nations adopted the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs) to ensure that by 2030, the world addresses the numerous issues confronting humanity to promote well-being, economic prosperity, and environmental protection. Muslim countries, under the Organization of Islamic Cooperation (OIC), also actively participate in implementing the 2030 Agenda. This study aims to examine how efficient Muslim countries have been in achieving the SDGs between 2010 and 2017. The information indicates which countries have the highest and lowest SDG achievement rates, using the Data Envelopment Analysis (DEA) method to determine the relative efficiency level. According to the findings, four countries – Kuwait, Qatar, Malaysia, and Türkiye – achieved the maximum efficiency level across the period assessed. The country with the lowest efficiency is Comoros. The analysis also found regional variations of efficiency in SDG achievement, with the region with the highest efficacy value is Central Asia, while East Africa has the lowest.

The Influence of Foreign Direct Investment (FDI), International Tourism and Export Value on Economic Growth in Member Countries of the Organization of Islamic Cooperation (OIC) During 2010-2020

Studies the effect of FDI, international tourism, export on economic growth have various results. Therefore, this study aims to determine the effect of FDI, international tourism, and exports on economic growth in OIC member countries in the 2010-2020 period using the panel data regression method. The number of samples used in this study were 45 countries. Simultaneously, there is a significant influence between the variables of FDI, international tourism, and export value on economic growth in OIC member countries. While partially FDI shows negative and significant results. On the other hand, international tourism has a positive and significant effect and exports also have a positive and significant effect. This study is only limited to 11 periods and three independent variables. For future researchers, it is expected to develop the number of variables and can increase the observation time.

Toplulukları Güçlendirmek: Bangladeş’te Covid-19 Sonrası Zekat Dağıtımını Yeniden Tanımlamak

Poverty persists as a global challenge, particularly in economically underdeveloped Islamic countries. Despite government efforts to address income inequality and reduce poverty, these issues continue to afflict societies. To effectively confront this pressing problem, it is imperative to scrutinize the impact of Zakat, a crucial institution in Islam, and its potential contribution to alleviating these challenges. Zakat, one of Islam's five pillars, plays a pivotal role as a guiding economic force and a form of worship. It serves as a means of social assistance and solidarity, fostering stronger bonds between the donor and the recipient. Zakat cultivates feelings of love, compassion, and mercy while also mitigating jealousy, envy, and hostility. Furthermore, it operates as a mechanism for income redistribution in societies marked by unequal wealth distribution. This long-standing practice is rooted in the belief that wealth is a trust from Allah and underscores the importance of sharing it with those in need. Zakat has the potential to address a range of economic issues, from supporting the marriages of impoverished individuals to tackling unemployment. It remains significant as an expression of social responsibility and a means to promote justice and compassion, ultimately creating a more equitable income distribution. The objectives of Zakat are multifaceted, encompassing goals such as poverty alleviation, wealth redistribution, strengthened social bonds, wealth purification, meeting basic needs, and empowering vulnerable individuals. However, in Muslim-majority countries such as Bangladesh, the impact of zakat distribution is often inadequate due to a lack of self-discipline and understanding among Muslims. Additionally, the economic recession triggered by COVID-19 has exacerbated poverty in Bangladesh, with adverse effects on employment and a significant increase in poverty rates among low-income workers. Fair and Shariah-compliant zakat distribution remains underutilized in these regions, including South Asian countries within the Organization of Islamic Cooperation. The ease of collective cash or clothing distribution in zakat practices has led to inaccurate assessments of the genuinely needy. This traditional approach has also drawn criticism for its deviation from Islamic principles. This study examines changing perceptions and practices of zakat distribution in Bangladesh, focusing on promoting effective and equitable distribution methods. These methods may include income-generating expenditures, vocational training, microfinance initiatives, and targeted cash transfers. By adhering to Zakat's authentic principles and purposes, Bangladesh can leverage its potential to alleviate poverty and foster a compassionate society per Islamic teachings. Emphasizing the importance of Zakat and applying it fairly can drive significant progress in poverty reduction and social development in Islamic countries like Bangladesh. This study seeks to explore innovative approaches to zakat distribution that align with contemporary economic challenges and societal dynamics, ultimately contributing to a more equitable and prosperous future for the people of Bangladesh. As a result, poverty remains an ongoing problem in Islamic countries, and Zakat is a powerful tool to overcome this problem. By revising and improving the zakat distribution practices in Bangladesh, where the principles of Islamic economics guide efforts to reduce poverty and increase social welfare, work can be done toward building a more just and compassionate society.

Qualitative perspectives of middle and high skilled workers on humanitarian crowdfunding for poverty reduction in selected organization of Islamic cooperation

Crowd humanitarian fund, otherwise termed as mutual fund, has overwhelmingly been discussed by many scholars and researchers in western countries. There is obscurity in existing literature in Islamic countries with respect to the interconnectedness between various Islamic financial concepts within the Islamic legal framework and the conceptualization of crowd humanitarian funds. The primary objective of this paper is to address this obscurity by investigating the perspectives of middle- and high-skilled workers among members of the Organization of Islamic Cooperation (OIC) with respect to the crowd humanitarian fund. Hence, the central research question (CRQ) was formulated as follows: How do the middle and high-skilled workers perceive the generation of crowd-humanitarian funds for the purpose of helping the less privileged citizens in Organization of Islamic Cooperation (OIC) countries? The qualitative method was used as the methodology of the study. In order to collect data for the study, an open-ended interview was employed, and a total of 22 participants were interviewed. Three major themes were generated from the interview, namely: An overview of crowd humanitarian funds, categories of less privileged people in OIC countries, and the use of humanitarian funds for poverty reduction. The findings indicated that the traditional method of collecting funds from crowds is to assist with any humanitarian issue is still applicable in many Muslim countries. In addition, the unity in contributing to the humanitarian fund from the crowd, that is, common practice in Muslims’ culture is what Western society terms as crowdfunding. It is further revealed that there are different categories of people, such as the poor, the needy, and people with low incomes, who can benefit from crowdfunding, especially by using it for investment purposes. In addition, crowdfunding is considered an essential monetary relief to less fortunate individuals or communities in order to have a sustainable life. It can also be used for provision of social amenities such as food, shelters, clothes, hospitals, schools, and job opportunities.

Pharmaceutical Exports of Iran in OIC Region and Entering International Markets

Background: There are various pharmaceutical companies in Iran with high potential. Due to the lack of business with international markets for exports, Iranian pharmaceutical products are mostly traded in domestic markets. Despite numerous studies on pharmaceutical exports in the literature, the performance of Iran in pharmaceutical exports to the Organization of Islamic Cooperation (OIC), remains yet to be evaluated. The novelty of the present work lies in filling this research gap and helping develop policies to expand pharmaceutical exports of Iran.
 Materials and Methods: Analysis of results on the current performance of Iranian pharmaceutical exports indicated groups of factors. The most significant factors were product quality and government policies according to questionnaire survey.
 Results: Analysis of results on the current performance of Iranian pharmaceutical exports indicated groups of factors. The most significant factors were product quality and government policies according to questionnaire survey.
 Conclusion: It was concluded that supervision regulations of pharmaceutical exports were not developed to motivate the expansion of exports. Supervision and control of Iranian pharmaceutical industries would enhance the quality of pharmaceutical products and strongly contribute to the expansion of pharmaceutical exports. It was also found that the quality improvement of pharmaceutical products was a key factor in increasing pharmaceutical exports to international markets.

The Concept of Islamic Social Finance Development Based on Financial Technology to Realize a Prosperous Society

Prosperity is a great goal that every country in the world aspires to. However, this condition will certainly not be achieved without a problem called poverty. If you look at the available data, about 30% of the world's population (1.56 billion) lives in multidimensional poverty; 50% of the world's population (3 billion) lives on less than $2.5 a day; And 80% of the world's population lives on less than $10 a day. This shows that Welfare in the world is only enjoyed by a small part of the population. A study published that OIC (Organization of Islamic Cooperation) member countries generally have a lower HDI (Human Development Index) than non-OIC countries. If viewed further, Islam has various solutions to avoid poverty through Islamic social finance instruments. Zakat, Infaq, and Waqf have great potential to be developed to prosper the community. So, in this paper, we will discuss the financial technology model used to develop the role of Islamic social finance instruments such as Zakat, infaq, and waqf. So that social and financial institutions can continue to develop various empowerment programs to prosper the community.

Does Renewable Energy Consumption a Driver for Economic Growth? Panel Data Analysis in Selected OIC Countries

This paper aims to examine the relationship between energy consumption from renewable energy sources, and economic growth expressed in GDP per capita in several OIC countries. The dataset used involves data from OIC (Organization of Islamic Cooperation) countries including Indonesia, Iran, Turkey, Saudi Arabia, Nigeria, Egypt, UAE, Malaysia, Bangladesh, and Pakistan for the period 2000 to 2018 obtained from the World Development Index. This study uses a dynamic panel estimation approach such as DOLS and FMOLS to determine the long-term relationship between variables. We also discuss how to use the panel Granger-causality test to estimate causality in the short term. The empirical result shows that in the long-run, renewable energy consumption doesn't have an effect on economic growth. Meanwhile, CO2 emissions were found to have a significant positive relationship with economic growth. Furthermore, the conservation hypothesis theory is accepted between economic growth and consumption of renewable energy. Thus, the implementation of conservation policies can be applied by taking into account economic growth.

Macroeconomics, human development and political stability: evidence from OIC countries

This study aims to examine and analyze the effect of macroeconomic variables on the Human Development Index (HDI) in the Organisation of Islamic Cooperation (OIC) countries with political stability as the moderating variable. The GMM (Generalized Method Moment) dynamic panel and the MRA (Moderated Regression Analysis) will be used for determining the type of moderation needed as analysis techniques. In the first section, the findings state that inflation and unemployment have no effect on HDI, This is due to the fact that inflation and unemployment are very dependent on global economic fluctuation. Meanwhile, trade openness has a significant positive effect on HDI and foreign direct investment has a significant negative effect on HDI. This can add to the evidence that a high level of trade openness can support HDI values in OIC countries. Trade Openness can strengthen the economy, education, and health simultaneously by increasing prosperity through increased demand, supply, and services in numerous sectors. Secondly, the value of the moderator variable (political stability) on the relationship between unemployment and HDI demonstrates that political stability acts as a "Quasi Moderator" which means that political instability can exacerbate the negative influence of unemployment on HDI in OIC countries. This research has implications for the importance of cooperation between OIC countries in various fields, especially in increasing trade, investment, job creation and good governance to support the expansion of human development in OIC nations and to build sustainable prosperity.

The role of economic convergence in the capability of the Islamic world

Achieving positive global development in today's world is possible through convergence. Major global competitors are moving forward by forming unions and agreements based on common interests. This is something that Islamic countries are in desperate need of. The focus of this research is also on the role of economic convergence in enhancing the capabilities of the Islamic world. In this research, a qualitative method has been used using articles, books and also according to detailed information from reliable global sources. The aim is for the Islamic world to reach a level of development through cooperation and solidarity among Islamic countries and by meeting the needs of the Islamic Ummah, freeing themselves from severe economic dependence. The results indicate that the Islamic world can effectively work towards common goals and maximize its economic potential. Islam, with its emphasis on Allah almighty, aims to bring honor and glory to Muslims and enable them to participate in international competition, utilizing their material and spiritual talents and abilities. With cultural, historical, and emotional ties among Muslim nations and the large group of 57 countries that make up the Organization of Islamic Cooperation, representing over one and a half billion people, accounting for nearly 60% of global strategic reserves, there is immense potential for economic convergence if they focus on common development-oriented interests and goals. By doing so, Islamic societies can thrive and make a significant impact in the international arena as a strong economic force

Examining the efficiency of stock markets using multifractal detrended fluctuation analysis. Empirical evidence from OIC (Organization of Islamic Cooperation) countries during the GFC and COVID-19 pandemic

PurposeThis study aimed to examine the efficient market hypothesis (EMH) for the stock markets of 12 member countries of the Organization of Islamic Cooperation (OIC), such as Egypt, Indonesia, Jordan, Kuwait, Malaysia, Morocco, Pakistan, Saudi Arabia, Tunisia, Turkey and the United Arab Emirates (UAE), during the global financial crisis (GFC) and the COVID-19 (CV-19) epidemic. The objective was to classify the effects on individual indices.Design/methodology/approachThe study employed the multifractal detrended fluctuation analysis (MF-DFA) on daily returns. After calculation and analysis, the data were then divided into two significant events: the GFC and the CV-19 pandemic. Additionally, the market deficiency measure (MDM) was utilized to assess and rank market efficiency.FindingsThe findings indicate that the average returns series exhibited persistent and non-persistent patterns during the GFC and the CV-19 pandemic, respectively. The study employed MF-DFA to analyze the sequence of normal returns. The results suggest that the average returns series displayed persistent and non-persistent patterns during the GFC and the CV-19 pandemic, respectively. Furthermore, all markets demonstrated efficiency during the two crisis periods, with Turkey and Tunisia exhibiting the highest and deepest levels of efficiency, respectively. The multifractal properties were influenced by long-range correlations and fat-tailed distributions, with the latter being the primary contributor. Moreover, the impact of the fat-tailed distribution on multifractality was found to be more pronounced for indices with lower market efficiency. In conclusion, this study categorizes indices with low market efficiency during both crisis periods, which subsequently affect the distribution of assets among shareholders in the stock markets of OIC member countries.Practical implicationsMultifractal patterns, especially the long memory property observed in stock markets, can assist investors in formulating profitable investment strategies. Additionally, this study will contribute to a better understanding of market trends during similar events should they occur in the future.Originality/valueThis research marks the initial effort to assess the impact of the GFC and the CV19 pandemic on the efficiency of stock markets in OIC countries. This undertaking is of paramount importance due to the potential destabilizing and harmful effects of these events on global financial markets and societal well-being. Furthermore, to the best of the authors’ knowledge, this study represents the first investigation utilizing the MFDFA method to analyze the primary stock markets of OIC countries, encompassing both the GFC and CV19 crises.

The OIC's Intra-Bloc and Extra-Bloc Trade: How Effective are the FTAs?

The present study evaluates the role of Free Trade Agreements (FTAs) in facilitating trade for the Organization of Islamic Cooperation (OIC) member countries. We used the structural gravity model and the Poisson pseudo-maximum likelihood estimator to examine annual bilateral trade from 2000 to 2019. We find that FTAs have a positive impact, which is more pronounced in the case of the intra-OIC trade. Furthermore, the findings show that the quality of governance in the source country influences the adjustment of the exporting process in response to the entry of an FTA. The majority of OIC countries currently have poor governance. Therefore, improving the governance conditions would encourage trade, particularly for the extra-bloc exports.