Selected OIC Countries Research Articles

Integrating Islamic Social Finance Institutions into Health Protection Programs: Cases of Selected OIC Countries

إن مبادئ وقيم الإسلام، كقاعدة شاملة للحياة، تتناول كل جانب من جوانب الوجود الإنساني بما في ذلك المجالات الاجتماعية والروحية والسياسية والقانونية والصحية والاقتصادية. تهدف الدراسة الحالية إلى دمج مؤسسات التمويل الاجتماعي الإسلامية مثل الزكاة والوقف والصدقات وبيت المال في برامج الحماية الصحية الاجتماعية الوطنية. في سياق الدول الإسلامية التي تواجه تحديات اقتصادية، حيث تكون القيود على التمويل والموارد شائعة، تستخدم هذه الدراسة منهجية بحثية مكتبية لتقييم كيف يمكن لمؤسسات مثل الزكاة والوقف والصدقات وبيت المال تعزيز المبادرات الحكومية لمعالجة التحديات المتعلقة بتمويل الرعاية الصحية. وتكشف النتائج أن النماذج القائمة على الوقف هي الأكثر استخدامًا في برامج الحماية الصحية، تليها المبادرات الممولة من الزكاة. ومع ذلك، فإن استخدام هذه المؤسسات لخدمات الرعاية الصحية العامة يواجه العديد من التحديات والعقبات، بما في ذلك عدم الكفاءة البيروقراطية، والقيود على الموارد، ومحدودية الابتكار. تكمن أصالة هذه الدراسة في نهجها الجديد المتمثل في الإشارة إلى الأحكام العلمية وهيئات الفتوى والنصوص الدينية لدعم جدوى دمج المؤسسات الإسلامية المذكورة أعلاه مع أنظمة الرعاية الصحية المعاصرة. وفي حين أن حوكمة مثل هذه المبادرات غالبًا ما تقتصر على الكيانات الخاصة أو شبه الحكومية داخل الوزارات الدينية، إلا أن هناك اهتمامًا متزايدًا بين الحكومات في البلدان الإسلامية بتبني مثل هذه النماذج. تؤكد الآثار المترتبة على نتائج هذا البحث على أهمية تعزيز الجهود في زيادة الوعي ومكافحة الفساد وتحسين الخبرة وسن التشريعات الداعمة وتمتين التعاون وتأمين التمويل المستدام واعتماد التقدم التقني وترقية البنية التحتية للرعاية الصحية لتحقيق الإمكانات الكاملة لهذه التكاملات. على الرغم من محدوديته الدراسة، إلا أن هذه الدراسة تقدم رؤى قيمة وإطارًا أساسيًا لصناع السياسات الذين يهدفون إلى سد الفجوات في تقديم الرعاية الصحية من خلال الدمج الاستراتيجي لمؤسسات التمويل الاجتماعي الإسلامي.

Impact of Investment and Labor Participation on Energy Consumption: A Panel Analysis on Selected OIC Countries

A country's economy cannot be separated from economic activity and energy consumption. A country's economic activity increases in proportion to its income. Furthermore, countries will respond to increased economic activity by changing their energy use. This research aims to assess how much extra energy is being utilized by economic activity to maintain the current environment. The results of the analysis show that the gross fixed capital creation variable has a major impact on the energy consumption of OIC countries. The labor force participation of individuals aged 15 to 24 also has a significant effect on energy use. Energy consumption can therefore be increased by raising investment and labor force participation. An annual data series (2010–2015) is used in this investigation. Panel data is the term for the sort of data that is utilized. Further research subjects can do dynamic panel data (countries) analysis by including factors not included in the research mode.

The Impact of Zakah, Islamic Bank, Macroeconomic Variables on Unemployment Rate: Evidence From Selected OIC Countries

Negara-negara Organisasi kerjasama Islam (OKI) mengalami peningkatan angka pengangguran yang signifikan, bahkan beberapa negara mempunyai tingkat pengguran tertinggi di dunia. Penelitian ini bertujuan untuk menguji pengaruh zakat, bank syariah, serta variabel ekonomi makro yang terdiri dari pertumbuhan ekonomi, inflasi dan perdagangan internasional terhadap tingkat pengangguran negara anggota Organisasi Kerjasama Islam (OKI). Penelitian ini menggunakan data tahunan pada 40 negara-negara OKI selama tahun 2012 hingga 2021. Hasil penelitian menunjukkan bahwa zakat dan perbankan tidak memberikan pengaruh yang signifikan terhadap pengurangan angka pengangguran sementara variabel ekonomi makro lainnya berpengaruh secara signifikan. Penelitian ini memberikan implikasi praktis kepada pengambil keputusan khususnya pemerintah untuk mengevaluasi kebijakan atas zakat dan bank syariah sehingga mampu memberikan pengaruh terhadap pengurangan angka pengangguran sebagaimana variabel ekonomi makro lainnya di negara-negara OKI.

The influence of institutional quality, economic freedom, and technological development on Islamic financial development in OIC countries

This study investigates the relationship between Institutional quality, Economic freedom, technological advancement, and Islamic financial development in selected OIC countries. This study employs the panel estimation method to examine annual data pertaining to Islamic bank industries across 22 countries, sourced from the SESRIC database, from 2013 to 2021. The findings show that the overall quality of institutions and economic freedom influence Islamic finance development. Further, the contribution of technological development appears when institutional quality indicates higher performance. Despite the predominant correlation observed among institutional indicators, this study, focusing on a comprehensive index, reveals a consistent and significant contribution of institutional quality to the growth of Islamic finance. Furthermore, this study's findings show that institutional quality and economic freedom are related; yet, the methods by which the foundations of each indicator influence financial development differ. The findings of this research underscore the importance of urging policymakers, particularly governmental authorities, to prioritize the development of policies and initiatives aimed at fostering a healthy and conducive environment. Emphasizing practical and transparent institutional frameworks is essential for cultivating a well-regulated economic environment.

Foreign Bias in the Global Portfolio Investment of Selected OIC Countries

Home bias reflects the propensity of investors to invest substantially in the domestic market. When investing abroad investors exhibit foreign bias, a tendency to overweight certain foreign markets based on their preferences. A thorough review of the literature reveals that foreign bias has not been thoroughly investigated in emerging countries, especially in the context of OIC countries. The purpose of this research is to examine the determinants of foreign bias in the global portfolio investment of selected OIC countries. An unbalanced bilateral panel data of 12 OIC countries’ outward equity investment in 74 host countries from the year 2001 to 2016 is analyzed. Cross-sectional analysis shows that OIC countries exhibit higher foreign bias towards their OIC counterparts especially in the MENA region. The results suggest, OIC countries not only exhibit foreign bias but also demonstrate regional bias. System Generalized Method of Moments (GMM) empirically shows that foreign bias is possibly explained by factors related to financial market openness, familiarity, information asymmetry, and global financial crisis. This study has a significant implication for the investors, fund managers and the regulators of the OIC countries. Investors and fund managers in OIC countries should be aware of the existence of foreign bias in their global portfolio investment that may potentially reduce the benefits of optimal diversification. It is a call for policymakers in the OIC countries to convince their local investors that international portfolio diversification offers risk sharing and eventually increases investment return.

The Trade Development Among OIC Countries: Exploring Challenges, Opportunities, and the Impact of the Covid-19 Pandemic

This paper investigates the factor determining the impact of trade development, challenges, and opportunities among various OIC countries. It studies the impact of socioeconomics, geo-political and cultural, factors using data between 2014 to 2022. The selected OIC countries from diverse regions, namely South and Southeast Asia, South America, Europe, Africa, and Central Asia. The study’s sample includes 50 countries out of a total of 57 OIC member nations. The paper employs a two-step GMM model to address endogeneity issues related to institutional variables. To account for the impact of the Covid-19 pandemic on trade, we have included a Covid-19 dummy variable in the model. Our results reveal that the Covid-19 dummy variable is significant in all models, indicating its significant impact on trade. Furthermore, most of the variables included in the study are found to be significant in all models. Overall, this study provides valuable insights into the factors that influence trade in OIC countries and the impact of the Covid-19 pandemic on trade.

Socioeconomic Development Based on Maqas ¯.id al-Shar¯ı‘ah: The Case of Selected OIC Countries

Socioeconomic Development Based on Maqas ¯.id al-Shar¯ı‘ah: The Case of Selected OIC Countries

Home bias in the global portfolio investment of selected OIC countries

Home bias reflects the propensity of investors to allocate their portfolio substantially in domestic market. The existence of home bias offers a new discovery that enables for a comprehensive and robust investigation of such phenomenon. Therefore, the main agenda of this research is to examine the determinants of home bias in the global portfolio investment of selected OIC countries. An unbalanced bilateral panel data of 12 OIC countries’ outward equity investment in 74 host countries from year 2001 to 2016 was analysed. System Generalized Method of Moments (GMM) estimator was employed to determine the factors influencing home bias. The findings show that home bias can be explained by factors related to institutional quality, familiarity, and global financial crisis. The relative factors introduced in the current study significantly explained the existence of home bias phenomenon. Summative findings indicate that home bias may discourage global portfolio investment, but there is a tendency of over-investment in MENA region based on geographical preferences. This study has a significant implication to investors, fund managers and regulators of the OIC countries. Investors and fund managers in OIC countries should be aware of the existence of home bias in their global portfolio that may potentially reduce the benefits of optimal diversification. It is a call for policy makers in the OIC countries to convince their local investors that international portfolio diversifications are able to minimize portfolio’s risk and eventually increase the investment returns.

The Impact of Country Risk Management on Economic Growth in the Selected OIC Countries

The Impact of Country Risk Management on Economic Growth in the Selected OIC Countries

Women’s Participation in Education and Politics: Evidence from the Selected OIC Countries

In this twenty-first century, it is crystal clear that education is the most powerful instrument for a nation’s progress and prosperity. Islam has also emphasized on educating both men and women since the beginning. So, Muslim countries should take initiatives to enhance participation of women in education. In reality, it is seen that women’s positions in the field of education and politics are very nominal compared to their male counterparts within Muslim countries. Situation is even worse in under-developed and non-democratic countries where the position of women and their participation in both the education and political sectors alongside men are visibly low. In this context, the purpose of this study is to explore the level of Muslim women’s participation in education and politics in some selected Muslim countries. Two South-Asian countries, Bangladesh and Pakistan, two south-east Asian countries, Malaysia and Indonesia, and the Middle East and North Africa (MENA) countries have been considered for this study. Thus, empowered women can take part in politics to resolve social issues. One of the findings of this study is that in democratic countries such as; Malaysia, Indonesia, and Bangladesh, women’s participation in both the educational and political sectors have been significantly improving over the years. Though economic conditions and social stigma, directly and indirectly, are still the barriers to enhance women’s education level as well as their participation in politics. Finally, the study highlights the obstacles that hinder women’s participation in both sectors and discusses the remedies to overcome the situation from an Islamic point of view.

Risk-adjusted profitability and stability of Islamic and conventional banks: Does revenue diversification matter?

Revenue diversification in banking offers opportunities and threats. Recent academic research shows that disadvantages may outweigh advantages, in terms of both volatility of profitability and bank riskiness. Literature on this topic in emerging countries and in the field of Islamic finance is limited: our aim is to empirically test if revenue diversity affects Islamic banks differently than conventional institutions. We analyze the impact of income diversification on profitability and firm-risk of banks in selected OIC countries, in the period 2007–2016, using a comprehensive dataset of 47 Islamic and 154 conventional banks, through diverse measures and econometric approaches. We find that diversification provides lower rewards for Islamic banks than conventional banks, with effects that are stronger for accounting-based measures rather than market-based metrics. Shares of non-interest income positively contribute to profitability regardless of the business model, whereas income diversification shows a not significant effect on the risk-adjusted profitability of Islamic banks. Moreover, we do not find any relationship between income diversification and stability for both conventional and Islamic banks.

EVALUATING THE EFFECT OF ISLAMIC FINANCING TO FINANCIAL DEVELOPMENT: EVIDENCE FROM OIC COUNTRIES

The development of Islamic finance is governed by Islamic laws (Shariah). The main principles that regulate all forms of transactions in Islamic banking activities include the prohibition of interest or usury (riba),the use of excessive risk (gharar), and gambling (maysir). The Islamic finance industry has become a prominent sector and is one of the fastest growing components of financial developments over the last decade in the global financial system. The availability of large numbers of Islamic finance products will increase significantlyas there have been a growing demand throughout the world, especially in OIC participating countries. Hence, the objective of this study is to identify the important factors that enhances financial development in the selected OIC countries (Malaysia, Indonesia, Jordan, Kuwait, Saudi Arabia, Sudan and Yemen). Three indicators of financial development were used; Islamic finance, broad money and liquid liabilities. The data used in this study is the panel data from the year 1990 to 2012 which were obtained from the International Monetary Fund, Islamic Banks and Financial Institutions Information (IBIS), and World Bank databases. This study employed pooled OLS, fixed and random effect model. The results indicate that there are significant relationships between Islamic finance and financial development. Specifically, this study found that liquid liabilities and Islamic finance are two factors that have significantly influenced financial development in the OIC countries. Furthermore, the findings suggest that the OIC governments are required to develop policies that would integrate Islamic finance into their financial system. These policies should be centred around regulatory framework and supervisory role to utilize Islamic finance for greater economic growth. Keywords: Islamic finance; financial development; OIC countries; pooled OLS, fixed effect; random effect

PROMOTING A SHARING ECONOMY IN THE ISLAMIC FINANCE INDUSTRY: A STUDY OF SELECTED OIC COUNTRIES

Islamic finance has been in existence for the past centuries. Nonetheless, the realization of the real objectives of the industry is still a dream yet to be true. The goal of Islamic finance is to promote a sharing economy whereby money is not concentrated in the hands of a few individuals. This purpose of this study is to investigate the application of mudarbah and musharakah concepts which facilitate a sharing economy where profit and loss is shared between the bank and customer compared to debt financing that utilizes murabahah concept. The methodology is based on secondary data obtained from central banks of five selected OIC countries. The results indicated that Indonesia, Sudan and Bangladesh recorded the highest amounts in terms of mudarabah financing while Malaysia, Indonesia and Pakistan recorded the highest amounts in terms of musharakah financing. The results also indicated that murabahah financing is high in Malaysia, Bangladesh, Indonesia and Sudan. Pakistan registered the lowest amount in terms of murabahah financing.

Does Cost Effciency Affect Liquidity Risk in Banking? Evidence from Selected OIC Countries

Does Cost Effciency Affect Liquidity Risk in Banking? Evidence from Selected OIC Countries

Determinants of Foreign Direct Investment (FDI) in Agriculture Sector based on Selected High-income Developing Economies in OIC Countries: An Empirical Study on the Provincial Panel Data by Using Stata, 2003-2012

This research endeavours to set out to empirically examine the determinants of Foreign Direct Investment (FDI) in Agriculture Sector based on selected high-income developing economies in OIC countries. The agriculture sectors react as important keys in the expansion of any economy growth to eliminate the poverty issues. Therefore, it reviews the experiences of agriculture investment in selected member countries with a view to identify potential roles for countries seeking FDI and their development partners in nurturing FDI intra OIC especially in the agriculture new investment. In this study, the FDI in Agriculture Sector react as dependent variable and the independent variable economic determinant, list of market size, inflation, poverty, exchange rate and infrastructure in selected OIC Countries (Malaysia, Oman and Brunei).

THE EFFECT OF MAQĀṢID-BASED DEVELOPMENT VARIABLES ON ECONOMIC GROWTH BASED ON UMER CHAPRA’S PERSPECTIVE (CASE STUDY: NINE SELECTED OIC COUNTRIES)

Objectives : Human Development Index (HDI) has multidimensional aspects of life. In fact, HDI measures only physical aspects that are needed by human such as education, health and wealth. Accordingly, discussing on human must cover material, physical and spiritual aspects. Maqāṣid is needed as a wasilah (medium) to promote the benefit of human (maslahat), which contains of daruriyyat, hajiyat and tahsiniyat. By then, this study aims to analyze maqāṣid based development variables of Umer Chapra perspective on economic growth in 9 selected OIC member countries. Method : The methodology of the study used mixed methods: qualitative and quantitative. The quantitative applies panel data regression analysis with 9 selected OIC countries (Indonesia, Jordan, Kazakhstan, Kyrgyzstan, Mesir, Pakistan, Togo, Turkey and Uzbekistan) with time series from 2004 to 2013. For qualitative applies content analysis approach by using tafsir of Ibnu Katsir. Results : The finding shows that all independent variables, which are literacy rate, enrollment of school, poverty rate, gini index, life expectancy at birth, rule of law and voice accountability have significant effect on economic growth in 9 selected OIC member countries, both simultaneously and individually. Conclusion : This study concludes that HDI which is bounded by maqāṣid approach affects on increasing of economic growth in 9 of OIC member countries significantly.

Determinants of Foreign Direct Investment (FDI) in Agriculture Sector Based on Selected High-income Developing Economies in OIC Countries: An Empirical Study on the Provincial Panel Data by Using Stata, 2003-2012

Abstract This research endeavour set out to empirically examine the determinants of Foreign Direct Investment (FDI) in Agriculture Sector based on selected high-income developing economies in OIC countries. The agriculture sectors react as important keys in the expansion of any economy growth to eliminate the poverty issues. Therefore, it reviews the experiences of agriculture investment in selected member countries with a view to identify potential roles for countries seeking FDI and their development partners in nurturing FDI intra OIC especially in the agriculture new investment. In this study, the FDI in Agriculture Sector react as dependent variable and the independent variable economic determinant, list of market size, inflation, poverty, exchange rate and infrastructure in selected OIC Countries (Malaysia, Oman and Brunei).

The Efficacy of Energy Production and Economic Growth in Aggregate Energy Consumption: A Panel Data Evidence from Selected OIC Countries

This paper examines correlated variables of energy resources and growth, and their contribution in aggregate energy consumption. Its main objective is to identify the efficacy of energy, as well as to find out to which extent an economy is based on energy in order to extrapolate whether it is highly linked to energy-based industries or not. For this purpose, an empirical model is regressed for the logarithmic annual stationary data of selected OIC countries over the period 1991-2010. The results reveal that the GDP growth in Saudi Arabia has led to reduced levels of aggregate energy consumption, and does not for the UAE in the short-run. Moreover, the economies of Malaysia and Libya are highly linked to energy use especially natural gas in the long-run. And vice versa for Algeria and Indonesia in which the crude oil and natural gas production are not statistically significant DOI: 10.5901/mjss.2015.v6n3p590