ZAKAT AND ITS IMPACT ON ECONOMIC GROWTH IN INDONESIA AND MALAYSIA
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'.
Zakat, Economic Growth, GMM Model