The Nexus of Islamic Finance and Poverty

Andi Parewangi and Azwar Iskandar

Hitotsubashi Journal of Economics, 2020, vol. 61, issue 2, 111-139

Abstract: This paper analyzes the short and long-run asymmetrical relationship between Islamic financing and poverty. We apply Autoregressive Distributed Lag on Indonesia data during 2003 to 2017 and provide interesting result: first, Islamic financing significantly helps to reduce the poverty both in the short run and also in the long run. Second, the role of GDP per capita on poverty reduction is inconclusive. Third, the structural break in 2006 significantly affects the short run dynamics of poverty, while the impact of structural break in 2010 is mixed. Fourth, there is evident that Islamic financing respond to the poverty condition in Indonesia.

Keywords: Islamic financing; poverty; asymmetric cointegration; bound test; ARDL (search for similar items in EconPapers)
JEL-codes: C22 D90 E40 G20 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitjec:v:61:y:2020:i:2:p:111-139

DOI: 10.15057/hje.2020006

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