The influence of Islamic religion on the development of entrepreneurship considering the moderating role of Islamic banking: a case study of OIC member countries.

Articles in Press

Authors

1 Faculty of Islamic Economics, Allameh Tabataba'i University, Tehran, Iran

2 Higher Education Institute of Islamic Human Sciences, Al-Mustafa International University

10.30471/iee.2025.10518.2460

Abstract

Islam introduces itself as an entrepreneurial religion, meaning that it encourages and promotes entrepreneurial activities. On the contrary, there is a view that Islam generally hinders entrepreneurship in Muslim societies. Based on these conflicting perspectives regarding the relationship between Islam and entrepreneurship, and in an effort to fill this research gap, the aim of the present study is to evaluate whether Islam acts as an obstacle to entrepreneurship and whether the presence of Islamic banking institutions moderates such a relationship. For this purpose, data from 57 member countries of the Organization of Islamic Cooperation (OIC) during the period 2010 to 2023 were utilized. The data analysis method is based on panel data. The findings of the study revealed that in the absence of Islamic banking, Islam has a negative impact on entrepreneurial development. This is because, in countries where a significant portion of the population adheres to Islamic laws and prohibits borrowing and lending with interest, entrepreneurship is weakened in the absence of Sharia-compliant financial alternatives (i.e., Islamic banks). However, considering the moderating role of Islamic banks, the presence of Islam can lead to the strengthening and development of entrepreneurship. Accordingly, it is concluded that Islam can fulfill its main role in promoting entrepreneurship only when its tools, such as Islamic banks, are also present in society.

Keywords

Journal of Economic Essays; an Islamic Approach

Articles in Press, Accepted Manuscript
Available Online from 06 January 2025

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