<![CDATA[This paper aims to explore the crowding-out effect in the context of Islamic economics. Specifically, has the government's issuance of sukuk resulted in a decrease or even a negative impact on the financing growth of Islamic banks? In order to examine this effect, we use monthly data from all Islamic commercial banks in Indonesia from January 2008 to December 2023. This study employs autoregressive distributed lag (ARDL) for data analysis. The results indicate that the growth in outstanding government sukuk is negatively and significantly related to the financing growth of Islamic banks, especially in the short term. In the long term, the growth in outstanding government sukuk tends not to have a significant effect on banking activities. Therefore, the growth of outstanding government sukuk has directly hampered Islamic economy and banking development.]]>
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