The Impact of Various Mode of Financings in Reducing Inequality in Various Groups of Countries

Irma Yuliani, Muhammad Abdul Rohman

Abstract


The existence of Islamic bank not always provide positive impact to the real sector of economy. Declining inequality is one of the expected significant impacts with appyling mode of financing as instrument to relize that. This study aims to investigate the impact of mode of financing was applied by Islamic bank to reduce inequality among countries of IsDB Group. World bank data and IDB data of Islamic banks are employed as samples from 1977 to 2018. The results show that equity and leasing have a positive effect and significant to reduce inequality for low income countries, where the leasing or ijarah have the most effective impact than all. In addition, instalment sale of financing has a significant impact to reduce inequality for middle-income countries, loan is being the only significant mode of financing to reduce inequality in all IDB countries. Unfortunately, Mudharabah, PLS (profit and loss sharing), Murabahan and Istishna have not significantly impact to reduce inequality

Full Text:

PDF

References


Ang, J. B. (2010). Finance and Inequality: The Case of India. Southern Economic Journal, 76(3), 738–761. Retrieved from https://search.proquest.com/docview/212148717?accountid=17242

Beck, T., & Ross, A. D. (2007). Finance , inequality and the poor, (March), 27–49. https://doi.org/10.1007/s10887-007-9010-6

Claessens, S., & Perotti, E. (2007). Finance and inequality : Channels and evidence ✩, 35, 748–773. https://doi.org/10.1016/j.jce.2007.07.002

Clarke, G. R. G., Xu, L. C., Zou, H., Southern, S., Journal, E., Jan, N., … Zou, H. (2006). Finance and Income Inequality : What Do the Data Tell Us ?, 72(3), 578–596.

Haan, J. De. (2017). Finance and income inequality : A review and new evidence, 50(April), 171–195. https://doi.org/10.1016/j.ejpoleco.2017.04.007

Hamori, S., & Hashiguchi, Y. (2012). The effect of financial deepening on inequality: Some international evidence. Journal of Asian Economics, 23(4), 353–359. Retrieved from https://econpapers.repec.org/RePEc:eee:asieco:v:23:y:2012:i:4:p:353-359

Majeed, M. (2017). Inequality, Finance and Development: Evidence from Low-Income Developing Economies. Magallat Al-Tanmiyat Wa-Al-Siyasat Al-Iqtisadiyyat, 19(1), 33–48. Retrieved from https://search.proquest.com/docview/2010643950?accountid=17242

Mookerjee, R., & Kalipioni, P. (2010). Availability of fi nancial services and income inequality : The evidence from many countries. Emerging Markets Review, 11(4), 404–408. https://doi.org/10.1016/j.ememar.2010.07.001

Prete, A. Lo. (2013). Economic literacy , inequality , and financial development. Economics Letters, 118(1), 74–76. https://doi.org/10.1016/j.econlet.2012.09.029

Shidqi, M. H. A. (2016). Pendalaman Sektor Keuangan dan Ketimpangan di Indonesia. Universitas Indonesia.

Wooldridge, Jeffrey M., 1960-. (2012). Introductory econometrics : a modern approach. Mason, Ohio :South-Western Cengage Learning,

Gujarati, D. N., & Porter, D. C. (2009). Basic econometrics. Boston, Mass: McGraw-Hill.




DOI: https://doi.org/10.22515/jfib.v3i2.2931

Refbacks

  • There are currently no refbacks.