Overview

Original Research

ZAKAT AND ITS IMPACT ON ECONOMIC GROWTH IN INDONESIA AND MALAYSIA

PAULINA 1, MUHAMMAD ERWAN 2, and DIKDIK SALEH SADIKIN 3.

Vol 18, No 10 ( 2023 )   |  DOI: 10.5281/zenodo.10171370   |   Author Affiliation: Management Department, Indonesia Banking School, Jl. Kemang Raya No. 35, Jakarta 1; Economic Sekolah Tinggi Ilmu Kepolisian, Jl. Tirtayasa Raya No. 6, Kebayoran Baru, Jakarta 2; Accounting Department, Indonesia Banking School, Jl. Kemang Raya No. 35, Jakarta 3.   |   Licensing: CC 4.0   |   Pg no: 1187-1206   |   Published on: 21-10-2023

Abstract

This study aims to see the impact of zakat distribution in Indonesia and Malaysia on economic growth. The variables used in the study are economic growth in the previous year, financial development, openness, zakat distribution and population. The samples used are Indonesia and Malaysia, and the data processing technique is dynamic panel data with GMM (Generalized Method of Moments). The results showed: 1. Economic growth in the previous year has no significant effect on economic growth; 2. Openness / international trade has no significant effect on economic growth; 3. Financial development / money supply has a significant negative effect on economic growth; 4. Zakat distribution has a significant positive effect on economic growth; 5. Population has a significant positive effect on economic growth. The results of this study indicate that the distribution of zakat in Indonesia and Malaysia follows the growth-led zakat hypothesis, or the so-called 'demand-following view'.

Keywords

Zakat, Economic Growth, GMM Model