Does Islamicity Affect Economic Growth? Evidence From Oic, High, Middle, and Low-Income Countries

Abstract

Islam is a way of life which not only affects the social and personal aspects of human life but also plays a significant part in the political and economic decisions of the people. Empirical studies on the chief determining factors of economic growth have neglected the effect of Islamicity on economic growth. This study expands upon the recent literature on economic growth and Islamicity. By using the Islamicity indices data for the first time, this study provides a brand-new viewpoint on Islamicity and the economic growth nexus in the world, focusing on sub-divisions of high, middle, and low-income countries and the Organization of Islamic Countries (OIC). The data spans from 2010 to 2017 while using a dynamic model. By applying the panel techniques, we provide empirical evidence indicating that the Islamicity effect becomes weaker as the economy grows regardless of whether a country is an OIC member.

Islamicity indices: an extensive systematic literature review

“…Therefore, the Maqasid approach was adopted for any index involved in calculating well-being. The subsequent index is based on Maqasid al-Shari’ah for human benefit (Rehman et al , 2022).…”