Promote the understanding and use of sukuk

Oct 13, 2025 by windailys.com 59 views

The Influence of Islamic Capital Markets on Indonesia's Economic Growth for the Period 2015 - 2021

Introduction

The Islamic capital market in Indonesia has experienced significant growth and development in recent years. As a major player in the country's financial sector, the Islamic capital market has the potential to contribute to Indonesia's economic growth. This study aims to analyze the influence of the Islamic capital market on Indonesia's economic growth during the 2015 to 2021 period. The study uses economic growth (Y) as a dependent variable, while sharia shares, sukuk, and Islamic investment funds become independent variables.

Methodology

The data used in this study are secondary data that includes all quarterly sharia shares data from the Jakarta Islamic Index (JII), Sukuk, and Sharia Investment Funds published by the Financial Services Authority (OJK), as well as quarterly economic growth data from the Central Statistics Agency (BPS) in the same period. The analysis method used is a time series data analysis technique with the Vector Error Correction Model (VECM) model.

Results

The results of the study showed that in the long run, sharia shares and Islamic investment funds have a positive and significant influence on economic growth. Conversely, the sukuk variable shows an insignificant negative effect on economic growth.

Deeper Analysis

In this context, the positive influence of Islamic shares and Islamic investment funds on economic growth can be understood. Sharia stocks offer alternative investments that not only provide financial benefits but also follow sharia principles. This attracts investors who want to invest without violating religious provisions, thereby increasing the amount of funds in circulation in the market and encouraging economic growth.

Sharia investment funds also play an important role in supporting various economic sectors. With this fund, projects in accordance with sharia can be financed, which in turn creates jobs and increase consumption. The growth of these sectors not only contributes to GDP, but also improves the welfare of the general public.

On the other hand, the existence of sukuk, which is an instrument of Islamic financing, does not show a significant impact. Although sukuk is designed to help funding public projects and infrastructure, challenges in the implementation and understanding of the community about sukuk may be a factor that influences its effectiveness in supporting economic growth. In addition, if the sukuk is not managed properly, this can have a negative impact on investor perceptions and reduce their interest in investing in this instrument.

The Role of Sharia Shares in Economic Growth

Sharia shares have been shown to have a positive influence on economic growth. This is because sharia shares offer alternative investments that not only provide financial benefits but also follow sharia principles. This attracts investors who want to invest without violating religious provisions, thereby increasing the amount of funds in circulation in the market and encouraging economic growth.

The Role of Sharia Investment Funds in Economic Growth

The Challenges of Sukuk in Supporting Economic Growth

The existence of sukuk, which is an instrument of Islamic financing, does not show a significant impact. Although sukuk is designed to help funding public projects and infrastructure, challenges in the implementation and understanding of the community about sukuk may be a factor that influences its effectiveness in supporting economic growth. In addition, if the sukuk is not managed properly, this can have a negative impact on investor perceptions and reduce their interest in investing in this instrument.

Conclusion

Overall, the Islamic capital market has great potential in encouraging Indonesia's economic growth, especially through Islamic shares and Islamic investment funds. Therefore, it is necessary to effort to further promote the understanding and use of sukuk and develop other sharia instruments. With the right steps, the Islamic capital market can contribute greater in sustainable economic development in Indonesia.

Recommendations

Based on the findings of this study, the following recommendations are made:

Promote the understanding and use of sukuk: Efforts should be made to promote the understanding and use of sukuk among investors and the general public.
Develop other sharia instruments: Other sharia instruments, such as sharia bonds and sharia derivatives, should be developed to provide more options for investors and to increase the liquidity of the Islamic capital market.
Improve the management of sukuk: The management of sukuk should be improved to ensure that it is transparent and efficient.
Increase the awareness of sharia shares and sharia investment funds: Efforts should be made to increase the awareness of sharia shares and sharia investment funds among investors and the general public.

Limitations of the Study

This study has several limitations. Firstly, the study only analyzed the influence of the Islamic capital market on Indonesia's economic growth during the 2015 to 2021 period. Secondly, the study only used secondary data, which may not be comprehensive or accurate. Finally, the study only analyzed the influence of sharia shares, sukuk, and Islamic investment funds on economic growth, and did not consider other factors that may influence economic growth.

Future Research Directions

Future research should aim to overcome the limitations of this study. For example, future research could analyze the influence of the Islamic capital market on Indonesia's economic growth over a longer period of time. Future research could also use primary data to ensure that the data is comprehensive and accurate. Finally, future research could analyze the influence of other factors on economic growth, such as government policies and international trade.

Conclusion

In conclusion, this study has shown that the Islamic capital market has great potential in encouraging Indonesia's economic growth, especially through Islamic shares and Islamic investment funds. Therefore, it is necessary to effort to further promote the understanding and use of sukuk and develop other sharia instruments. With the right steps, the Islamic capital market can contribute greater in sustainable economic development in Indonesia.
Frequently Asked Questions (FAQs) about the Influence of Islamic Capital Markets on Indonesia's Economic Growth

Q: What is the Islamic capital market?

A: The Islamic capital market is a segment of the financial market that operates based on Islamic principles and sharia law. It provides a platform for investors to invest in Islamic financial instruments, such as sharia shares, sukuk, and Islamic investment funds.

Q: What is the role of sharia shares in economic growth?

A: Sharia shares have been shown to have a positive influence on economic growth. This is because sharia shares offer alternative investments that not only provide financial benefits but also follow sharia principles. This attracts investors who want to invest without violating religious provisions, thereby increasing the amount of funds in circulation in the market and encouraging economic growth.

Q: What is the role of sharia investment funds in economic growth?

A: Sharia investment funds also play an important role in supporting various economic sectors. With this fund, projects in accordance with sharia can be financed, which in turn creates jobs and increase consumption. The growth of these sectors not only contributes to GDP, but also improves the welfare of the general public.

Q: What are the challenges of sukuk in supporting economic growth?

A: The existence of sukuk, which is an instrument of Islamic financing, does not show a significant impact. Although sukuk is designed to help funding public projects and infrastructure, challenges in the implementation and understanding of the community about sukuk may be a factor that influences its effectiveness in supporting economic growth. In addition, if the sukuk is not managed properly, this can have a negative impact on investor perceptions and reduce their interest in investing in this instrument.

Q: How can the Islamic capital market contribute to sustainable economic development in Indonesia?

A: The Islamic capital market can contribute to sustainable economic development in Indonesia by providing a platform for investors to invest in Islamic financial instruments that are aligned with sharia principles. This can help to increase the amount of funds in circulation in the market and encourage economic growth.

Q: What are the benefits of investing in the Islamic capital market?

A: The benefits of investing in the Islamic capital market include:

Higher returns: Islamic financial instruments, such as sharia shares and sukuk, can provide higher returns compared to conventional financial instruments.
Lower risk: Islamic financial instruments are designed to be more risk-averse, which can help to reduce the risk of investment.
Alignment with sharia principles: Islamic financial instruments are designed to be in line with sharia principles, which can provide a sense of comfort and security for investors who are concerned about the ethics of their investments.

Q: What are the limitations of the Islamic capital market in Indonesia?

A: The limitations of the Islamic capital market in Indonesia include:

Limited awareness: There is a lack of awareness about the Islamic capital market among investors and the general public.
Limited product offerings: The Islamic capital market in Indonesia has limited product offerings, which can make it difficult for investors to find suitable investment options.
Regulatory challenges: The Islamic capital market in Indonesia is subject to regulatory challenges, which can make it difficult to operate and grow.

Q: What are the future directions for the Islamic capital market in Indonesia?

A: The future directions for the Islamic capital market in Indonesia include:

Increasing awareness: Efforts should be made to increase awareness about the Islamic capital market among investors and the general public.
Developing new products: New Islamic financial products should be developed to provide more options for investors and to increase the liquidity of the Islamic capital market.
Improving regulation: Regulatory frameworks should be improved to provide a more conducive environment for the Islamic capital market to grow and develop.

Q: What is the role of the government in promoting the Islamic capital market in Indonesia?

A: The government has a crucial role to play in promoting the Islamic capital market in Indonesia. This includes:

Providing regulatory support: The government should provide regulatory support to the Islamic capital market, including the development of a clear and comprehensive regulatory framework.
Increasing awareness: The government should increase awareness about the Islamic capital market among investors and the general public.
Providing incentives: The government should provide incentives to encourage the growth and development of the Islamic capital market.

Q: What is the role of the private sector in promoting the Islamic capital market in Indonesia?

A: The private sector has a crucial role to play in promoting the Islamic capital market in Indonesia. This includes:

Developing new products: The private sector should develop new Islamic financial products to provide more options for investors and to increase the liquidity of the Islamic capital market.
Increasing awareness: The private sector should increase awareness about the Islamic capital market among investors and the general public.
Providing education and training: The private sector should provide education and training to investors and the general public about the Islamic capital market.