‘Azizah Fathma

Grounded in the financial development-economic growth nexus, this study aims to explore the role of Islamic banking in shaping sectoral economic growth in Indonesia. Specifically, it examines the effects of Islamic bank financing (IBF) and non-performing financing (NPF) on sectoral GDP to identify variations in their impact across key sectors. Using quarterly time-series data from 2011Q1 to 2024Q3, the Autoregressive Distributed Lag (ARDL) model was employed to examine short-term and long-term relationships. Findings reveal sector-specific variations in the effects of IBF and NPF. In the long run, IBF has a significant positive impact on the education sector (13.13), health (3.95), accommodation (3.30), and construction (2.73). In contrast, IBF shows a significantly negative effect in agriculture (–87.65), fisheries (–21.49), and real estate (–5.04). NPF generally shows negative effects on sectoral GDP, particularly in accommodation (–136.67), education (–1122.11), and manufacturing (–215.75), while showing unexpected positive effects in health (234.46) and real estate (7.50). Short-term analysis highlights both positive and negative effects of IBF and NPF, with notable variations across sectors where IBF boosts GDP in health (2.73) and sales (3.04), but negatively impacts manufacturing (–2.38) and fisheries (–8.04); NPF has a short-term negative effect in accommodation (–90.38) and education (–433.93), with lagged positive adjustments in some sectors. Lagged effects of NPF suggest delayed financial adjustments and sector-specific recovery patterns. These findings provide sector-specific empirical insights that can inform the design of more effective Islamic financial policies and targeted interventions to support inclusive and sustainable economic growth.

Type of the article: Research Article

Abstract
The adoption of Islamic banking services by Islamic academicians in Indonesia is crucial due to their influential role in promoting Shariah-compliant financial practices. This study aimed to examine the factors influencing their adoption behavior, with religious obligation as a central determinant. Using the Theory of Planned Behavior (TPB) as the foundation, the study analyzed the direct effects of religious obligation, relative advantage, access to service, trust, and social influence on adoption behavior, as well as their mediating effects when religious obligation serves as the foundation. Respondents were selected through purposive sampling for academicians with very strict eligibility criteria, where they must possess a formal bachelor’s degree in Islamic economics, Shariah, or Islamic finance, along with postgraduate education in a related discipline. The analysis was conducted in Indonesia in mid-2025 using Structural Equation Modeling with the Partial Least Squares approach based on 252 valid observations. The results revealed significant positive direct effects for religious obligation (β = 0.605), access to service (β = 0.201), and social influence (β = 0.188). Additionally, this study found a positive indirect relationship from religious obligation to the adoption of Islamic banking mediated by access to service (β = 0.096) and social influence (β = 0.090). This study concludes that campaigns targeting Islamic academicians must prioritize their sense of religious obligation as the core message. This should be reinforced with clear narratives about the ease of accessing Islamic banking services and compelling stories about the social respect and recognition they gain from peers when choosing Shariah-compliant financial practices.