Driving regional economy: Digital technology adoption's role for effective distribution of islamic social finance in Indonesia
Main Article Content
Abstract
Indonesia holds significant potential in leveraging the vast collection of Islamic social funds. Amid the widespread digital transformation within financial institutions, it is critical to examine the impact of the adoption of digital technology in affecting the distribution of Islamic social finance and its subsequent impact on regional economic development in Indonesia. The research utilized data from 21 provinces in Indonesia to construct a regression model that investigates and evaluates the performance of Islamic social fund distribution concerning regional economic growth. This study integrates a moderation effect model to assess the impact of digital adoption on this relationship. Grouped regression models were used to investigate further regional variations, with robustness checks conducted across different fundraising levels. The findings reveal a significant influence of Islamic social fund distribution on regional economic development, with digital adoption—measured by access to and use of digital technology—acting as a considerable moderator. Further heterogeneity analysis reveals that provinces with lower GINI coefficients experience a more pronounced dampening effect of Islamic social fund distribution on regional economic development, moderated by the extent of digital adoption. This research offers new insights into the relationships between Islamic social fund distribution and digital adoption (ICT) in regional economic development, providing strategic implications for philanthropic institutions and policymakers considering Islamic social fund management.
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
License
You are free to:
- Share — copy and redistribute the material in any medium or format
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
- Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- ShareAlike — If you remix, transform, or build upon the material, you must distribute your contributions under the same license as the original.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
Al-Faizin, A. W., Insani, T. D., & Widiastuti, T. (2017). Zakat as an obligatory system and its implications for social psychology of society (Social tafsīr of Sūrah Al-Tawbah: 103). International Journal of Zakat, 2(2), 43–53.
Amalia, R. Y., & Huda, N. (2020). Role of zakat in achieving Sustainable Development Goals (SDGs) in Indonesia. International Journal of Zakat and Islamic Philanthropy, 2(2), 199–204.
Anggraini, R. (2016). Analisis pengaruh dana zakat, infaq, shodaqoh (ZIS) dan inflasi terhadap pertumbuhan ekonomi di Indonesia pada periode 2011–2015 [Undergraduate thesis]. Surabaya.
Ardhiastuti, Y. (2018). Analisis pengaruh zakat terhadap peningkatan pendapatan mustahiq [Undergraduate thesis]. Surakarta.
Ashfahany, A. E., Hidayah, A. D. N., Hakim, L., & Mohd Noh, M. S. B. (2023). How zakat affects economic growth in three Islamic countries. Journal of Islamic Economic Laws, 6(1), 45–61. https://doi.org/10.23917/jisel.v6i1.21242
Bahrini, R., & Qaffas, A. A. (2019). Impact of information and communication technology on economic growth: Evidence from developing countries. Economies, 7(1). https://doi.org/10.3390/economies7010021
Behera, B., Haldar, A., & Sethi, N. (2024). Investigating the direct and indirect effects of information and communication technology on economic growth in the emerging economies: Role of financial development, foreign direct investment, innovation, and institutional quality. Information Technology for Development, 30(1), 33–56. https://doi.org/10.1080/02681102.2023.2233463
Fajarudin, I. (2019). Kontribusi zakat sebagai pendapatan negara dan instrumen penerimaan pajak (Studi interpretif). Paradigma Accountancy, 2(1), 25–38.
Farhadi, M., Ismail, R., & Fooladi, M. (2012). Information and communication technology use and economic growth. PLoS ONE, 7(11). https://doi.org/10.1371/journal.pone.0048903
Ferdinand, A. (2014). Metode penelitian manajemen. Badan Penerbit Universitas Diponegoro.
Firdaus, M., Beik, I. S., Irawan, T., & Juanda, B. (2012). Economic estimation and determinations of zakat potential in Indonesia. IRTI Working Paper Series WP 1433-07(August), 1–74.
Gheraia, Z., Abid, M., Sekrafi, H., & Abdelli, H. (2022). The moderating role of ICT diffusion between financial development and economic growth: A bootstrap ARDL approach in Saudi Arabia. Information Technology for Development, 28(4), 816–836. https://doi.org/10.1080/02681102.2021.1998759
Gujarati, D. N., & Porter, D. C. (2012). Buku 1 dasar-dasar ekonometrika (5th ed.). Salemba Empat.
Indrawan, I. W., & Herman, S. (2017). Integrated zakat and waqf model for refugees (IZWMR), proposal to improve livelihood of global refugees. Conference Paper, 1–10.
Jedidia, K. B., & Guerbouj, K. (2021). Effects of zakat on the economic growth in selected Islamic countries: Empirical evidence. International Journal of Development Issues, 20(1), 126–142. https://doi.org/10.1108/IJDI-05-2020-0100
bin Lahuri, S., Syamsuri, Kamaluddin, I., & Wulandari, Y. (2021). The role of zakat and waqf in Sustainable Development Goals (SDGs). Albukhary Social Business Journal, 2(2), 34–41. https://doi.org/10.55862/asbjv2i2a004
Magoutas, A. I., Chaideftou, M., Skandali, D., & Chountalas, P. T. (2024). Digital progression and economic growth: Analyzing the impact of ICT advancements on the GDP of European Union countries. Economies, 12(3), 1–17. https://doi.org/10.3390/economies12030063
Mahat, N. I., & Warokka, A. (2013). Investigation on zakat as an indicator for Moslem countries’ economic growth. Journal for Global Business Advancement, 6(1), 50–58. https://doi.org/10.1504/JGBA.2013.053478
Mankiw, N. G., Quah, E., & Wilson, P. (2012). Pengantar ekonomi makro. Salemba Empat.
Munandar, E., Amirullah, M., & Nurochani, N. (2020). Pengaruh penyaluran dana zakat, infak dan sedekah (ZIS) dan pertumbuhan ekonomi terhadap tingkat kemiskinan. Al-Mal: Jurnal Akuntansi dan Keuangan Islam, 1(1), 25–38.
Qudah, M. R. M., Munir, A. R., Sobarsyah, M., & Sabbar, S. D. (2022). The role of zakat, Islamic human development, and government support on the economic growth in Jordan. Cuadernos de Economia, 45(128).
Saputro, E. G., & Sidiq, S. (2020). The role of zakat, infaq and shadaqah (ZIS) in reducing poverty in Aceh Province. International Journal of Islamic Economics and Finance (IJIEF), 3(3), 63–94. https://doi.org/10.18196/ijief.3234
Sudrajat, B. (2023). The impact of Islamic social finance on economic growth in Indonesia: A ZISWAF development model approach. Cuadernos de Economia, 46(131), 156–164.
Sulaeman, R. M., & Widiastuti, T. (2021). The impact of zakat on socio-economic welfare before COVID-19 pandemic in Indonesia: A quantitative study. International Journal of Zakat, 6(2), 75–90. https://doi.org/10.37706/ijaz.v6i2.301
Suprayitno, E. (2020). The impact of zakat on economic growth in 5 state in Indonesia. International Journal of Islamic Banking and Finance Research, 4(1), 1–7. https://doi.org/10.46281/ijibfr.v4i1.470
Suriani, S., Riyaldi, M. H., Nurdin, R., Fadliansah, O., & Wintara, H. (2021). Zakat and sustainable development: Effect of zakat and macroeconomic variables on dependency ratio and poverty. 2021 International Conference on Decision Aid Sciences and Application (DASA 2021), 392–396. https://doi.org/10.1109/DASA53625.2021.9682377
Todaro, M. P., & Smith, S. C. (2020). Economic development (13th ed.).