Does Islamic Finance Boost Economic Growth? Emperical Evidence From Indonesia

Abstract

The rapid development of the investment industry also plays an essential role in maintaining a country's economic condition to remain stable. The COVID-19 pandemic that occurred since the fourth quarter of 2019 has resulted in fluctuations in the economic growth graph in Indonesia, but the movement of the Islamic capital market has increased even during the pandemic. So the purpose of this study is to analyze the effect of Sukuk, Sharia Stock, and Islamic Investment Funds on Indonesia's economic growth. This study uses a quantitative method, where the data source is secondarily obtained from OJK and BPS documentation in the monthly period January 2018 - August 2022 using the SPSS application version 25. The analysis technique used is the classical assumption test and multiple linear regression. From the research results conducted at an alpha of 5%, simultaneously, Sukuk, Sharia Stock, and Islamic Investment Funds variables affect Indonesia's economic growth. Partially, Sukuk and Islamic Mutual Funds have no significant effect on Indonesia's economic growth. Meanwhile, Sharia stocks have a significant effect on Indonesia's economic growth.Keywords: Sukuk, Sharia Stock, Islamic Investment Fund, Economic Growth,  Islamic Finance, ISSI