Authors: Nor Idayu Mahat; Ari Warokka
Addresses: College of Art and Sciences, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah, Malaysia ' Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia, 06010 Malaysia; MM Program, Gd. KH Dewantara, Lt. 5, Kampus A, Universitas Negeri Jakarta, Jakarta 13220, Indonesia
Abstract: This study examines the possibility of zakat as an alternative source of economic growth, which in most cases and prior studies Foreign Direct Investment (FDI) has been more preferable and become dominant development engine for emerging economies. We proposed the strategy to estimate the zakat and employed a multivariate regression to analyse a panel macroeconomic data of 19 Moslem countries for the period 2004-2010. The empirical results give some evidence that zakat is able to become a powerful resource of economic growth, or in other words, it could be domestic direct investment that provides source of fund to the country development. Although the proposed model is limited due to the availability of complete panel macroeconomic data, we conclude that zakat will become a serious implementable economic growth policy in Moslem countries reflecting a self-sufficient spirit, equitable distribution of wealth paradigm, and much more human-touch in managing national development.
Keywords: domestic direct investment; economic growth; regression modelling; zakat; Moslem countries; Muslim countries; Islam; Islamic countries; self-sufficiency; wealth distribution.
Journal for Global Business Advancement, 2013 Vol.6 No.1, pp.50 - 58
Available online: 25 Apr 2013 *Full-text access for editors Access for subscribers Purchase this article Comment on this article