THE ROLE OF ISLAMIC CAPITAL MARKET TO INDONESIA'S ECONOMIC GROWTH IN 2011 - 2021

Abstract

Investment in the Islamic capital market has developed along with the awareness of the Indonesian Muslim community to invest in a halal manner. This study investigates the effect of investment in the Islamic capital market, including Islamic stocks, sukuk and Islamic mutual funds on Indonesia's economic growth. The data sample used is time series data with a monthly frequency of Islamic stock, Islamic mutual funds, sukuk, and Indonesia's economic growth from 2011 to 2021. Hypothesis testing was carried out using the Ordinary Least Square (OLS) estimation method. This study found that Islamic stocks and sukuk had a positive and significant impact on Indonesia's economic growth, while Islamic mutual funds were insignificant. Furthermore, simultaneously, these three components of the Islamic capital market have a significant influence on Indonesia's economic growth. As an implication of the research, the government is expected to be able to pay attention to developing Islamic market capital related to the regulation and its infrastructure because it also contributes to the Indonesian economy.