The role of Islamic banking, macroeconomics factor, and regulation in Islamic moral economy: Evidence from oic countries using panel gmm

Miranti, Titis ORCID: https://orcid.org/0000-0002-8720-3809, Rahmawati, Zulfa Muasaroh Binti, Meylianingrum, Kurniawati ORCID: https://orcid.org/0000-0002-0814-7512, Jaya, Tiara Juliana ORCID: https://orcid.org/0000-0002-7598-7263 and Wicaksono, Ahmad Tibrizi Soni ORCID: https://orcid.org/0000-0001-8643-1351 (2025) The role of Islamic banking, macroeconomics factor, and regulation in Islamic moral economy: Evidence from oic countries using panel gmm. Presented at I-iECONS, 20 August 2025, Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia (USIM).

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Abstract

Countries that are members of the Organization of Islamic Cooperation (OIC) generally have great wealth potential. However, income inequality is still clearly visible in a number of member countries. In several studies, the inequality is studied through the Islamic Moral Economy (IME) approach with the Gini Ratio as the main proxy. This study aims to analyze the influence of Islamic banking factors represented by non-performing financing (NPF) and financing as well as macroeconomic indicators in the form of Gross Domestic Product (GDP) and inflation on income inequality in OIC countries. On the other hand, the quality of regulation as a guideline that regulates economic activity has the potential to moderate or distort the relationship between these variables. This study uses a sample of 14 OIC member countries with secondary data from the period 2013 to 2023. The analysis method used is a regression panel with the Generalized Method of Moments (GMM) approach as a parameter estimation method. The results of the study show that the financing and GDP variables have a significant effect on IME. In addition, the quality of regulation has been proven to weaken the influence of both on inequality. These findings indicate that policy and institutional quality play not only as control variables, but also as active factors in shaping the relationship between the financial sector and income inequality. Thus, OIC countries need to strengthen the Islamic banking system and maintain macroeconomic stability in order to encourage a fairer and more sustainable distribution of income in accordance with Islamic moral economic principles.

Item Type:	Conference (Paper)
Keywords:	islamic moral economy (ime); non-performing financing (npf); inequality; gini ratio; gmm; regression panel
Subjects:	15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150201 Finance 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150202 Financial Econometrics 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150203 Financial Institutions (incl. Banking) 14 ECONOMICS > 1402 Applied Economics
Divisions:	Faculty of Economics > Department of Islamic Banking
Depositing User:	Titis Miranti
Date Deposited:	26 Oct 2026 08:25

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