Bochner, Rodrigo
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Islamic Banks as Agents of Economic Growth: An Econometric Analysis of Islamic Economy Bochner, Rodrigo
AL-FALAH : Journal of Islamic Economics Vol. 2 No. 10 (2025)
Publisher : Institut Agama Islam Negeri (IAIN) Curup

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.29240/alfalah.v2i10.14653

Abstract

This study scrutinizes the role of Islamic banks as dynamic agents fostering economic growth underpinned by Shariah-compliant principles, notably risk-sharing, prohibition of interest (riba), and avoidance of excessive uncertainty (gharar). Utilizing advanced econometric methodologies including stationary tests (ADF, KPSS), Johansen co-integration error correction mechanisms, Granger causality, fully modified ordinary least squares (FMOLS), and quantile regressions on a broad panel dataset from 1990– 2023 covering Muslim-majority economies and GCC , the analysis confirms a statistically positive nexus between Islamic banking development and macroeconomic growth indicators such as GDP and capital formation. Incorporating mathematical models of profit-and-loss sharing (PLS) and asset-backed finance within stochastic optimization frameworks, elucidates the mechanisms by which Islamic finance bolsters financial stability, deepens financial inclusion, and promotes sustained development. The findings underscore the critical moderating impact of inflation and economic policy uncertainty, highlighting the necessity of macroeconomic stability to optimally leverage Islamic finance’s potentials. Policy recommendations include enhancing Shariah governance, expanding inclusive finance infrastructure, and reinforcing regulatory environments. This paper advances the literature by integrating Islamic economic theory with econometric modeling to delivering an interdisciplinary framework for future research, policy making and proposes a new understanding from an econometric perspective about impact of islamics economics in economic development.
Aligning Shariah And Environmental, Social, And Governance Criteria In Islamic Finance Perspective Bochner, Rodrigo
Research of Islamic Economics Vol. 3 No. 2 (2026): JANUARY 2026
Publisher : SAN Scientific

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.58777/rie.v3i2.475

Abstract

This study addresses a conceptual and practical gap in the literature regarding the systematic alignment between Shariah principles and Environmental, Social, and Governance (ESG) criteria within Islamic finance. Although both frameworks emphasize ethical conduct, social responsibility, and sustainable value creation, existing studies typically examine Shariah compliance and ESG performance in isolation, resulting in fragmented insights and a lack of an integrated analytical framework. This research aims to explain how Shariah principles can be aligned with ESG dimensions particularly governance and social responsibility and to identify challenges that hinder their effective integration into Islamic financial products. Using a qualitative research design, the study employs document and thematic analysis of prior empirical studies, regulatory standards, and institutional reports related to Islamic finance and ESG practices. The findings show that Shariah governance plays a key role in enhancing ESG performance; however, inconsistencies in interpretation, measurement, and regulatory harmonization remain significant obstacles. This study contributes an integrative perspective that positions Shariah as a normative framework capable of strengthening ESG objectives and advancing sustainable Islamic finance.