Investigating the Impact of the Islamic Financing Tool of Sukuk on the Economic Growth of Iran's Provinces: the Approach of Generalized Moments

Authors

1 PhD student, Department of Economics, Faculty of Economics, Management and Accounting, Islamic Azad University of Tabriz, Tabriz, Iran

2 Associate Professor, Economics, Faculty of Economics, Management and Accounting, Tabriz Islamic Azad University, Tabriz, Iran

3 Assistant Professor, Economics, Faculty of Economics, Management and Accounting, Islamic Azad University of Tabriz, Tabriz, Iran

Abstract

Due to the prominent role of financial institutions in economic growth, the financial system is considered one of the most important economic sectors of any country. But due to the Islamic nature of Iran's financial system, it is necessary to pay attention to Islamic orders, especially the sanctity of usury. Therefore, replacing conventional financial instruments with Islamic financial instruments and Sukuk at the head of them is one of the necessary processes of Islamic countries including Iran. Given that it is necessary to evaluate the role of Islamic financing tools in the economic growth of countries based on the principles and rules of Islamic economics, and also, based on the fact that sukuk is one of the most important financing tools in Islamic countries, the purpose of this study is to estimate the growth model economic for the provinces of the country and investigating the effects of the Islamic Sukuk financing tool on economic growth in the period of 1387-1400 by using the panel data method of generalized moments (GMM). The results of this study show that the issuance of sukuk has a positive and significant effect on the economic growth of the provinces. In addition, investment, education, inflation rate, and commercial openness have a positive and significant effect, and the unemployment rate, economic inequality, and mortality have a negative and significant effect on the economic growth of the provinces. Therefore, it is suggested that policymakers and planners increase the spread of Islamic financial instruments, adopt redistribution policies, pay more attention and increase budgets in the field of education and health, and improve political and commercial relations with other countries

Keywords

References

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Journal of Economic Essays; an Islamic Approach
Volume 20, Issue 40 - Serial Number 40
October 2023
Pages 279-306

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