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Development, Social Change, and Islamic Finance in Contemporary Indonesia

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  • Pepinsky, Thomas B.

Abstract

The global spread of Islamic finance has transformed the financial systems of many Muslim countries, but analysts know little about the factors that shape individuals’ demand for Islamic finance. This paper examines the socioeconomic origins of consumer demand for Islamic financial products, using original survey data from Indonesia, where a growing Islamic financial market coexists with a large conventional financial system. Modernization and globalization play critical roles in shaping individual use of Islamic financial products. Perhaps surprisingly, there is no evidence that Islamic piety has any systematic effect on consumers’ choice of Islamic versus conventional financial products.

Suggested Citation

  • Pepinsky, Thomas B., 2013. "Development, Social Change, and Islamic Finance in Contemporary Indonesia," World Development, Elsevier, vol. 41(C), pages 157-167.
    • Handle: RePEc:eee:wdevel:v:41:y:2013:i:c:p:157-167
    DOI: 10.1016/j.worlddev.2012.06.007
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    References listed on IDEAS

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    Cited by:

    1. Burhanudin Harahap & Tastaftiyan Risfandy, 2022. "Islamic Organization and the Perception of riba (Usury) and Conventional Banks Among Muslims: Evidence From Indonesia," SAGE Open, , vol. 12(2), pages 21582440221, May.
    2. Ghlamallah, Ezzedine & Alexakis, Christos & Dowling, Michael & Piepenbrink, Anke, 2021. "The topics of Islamic economics and finance research," International Review of Economics & Finance, Elsevier, vol. 75(C), pages 145-160.
    3. Juhro, Solikin M. & Narayan, Paresh Kumar & Iyke, Bernard Njindan & Trisnanto, Budi, 2020. "Is there a role for Islamic finance and R&D in endogenous growth models in the case of Indonesia?," Pacific-Basin Finance Journal, Elsevier, vol. 62(C).
    4. Khan, Abdullah & Rizvi, Syed Aun R. & Ali, Mohsin & Haroon, Omair, 2021. "A survey of Islamic finance research – Influences and influencers," Pacific-Basin Finance Journal, Elsevier, vol. 69(C).
    5. Biener, Christian & Eling, Martin & Schmit, Joan T., 2014. "Regulation in Microinsurance Markets: Principles, Practice, and Directions for Future Development," World Development, Elsevier, vol. 58(C), pages 21-40.
    6. Phan, Dinh Hoang Bach & Narayan, Paresh Kumar & Rahman, R. Eki & Hutabarat, Akhis R., 2020. "Do financial technology firms influence bank performance?," Pacific-Basin Finance Journal, Elsevier, vol. 62(C).
    7. Iyke, Bernard Njindan & Maheepala, M.M.J.D., 2022. "Conventional monetary policy, COVID-19, and stock markets in emerging economies," Pacific-Basin Finance Journal, Elsevier, vol. 76(C).
    8. Kamla, Rania & Haque, Faizul, 2019. "Islamic accounting, neo-imperialism and identity staging: The Accounting and Auditing Organization for Islamic Financial Institutions," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 63(C).
    9. Narayan, Paresh Kumar & Phan, Dinh Hoang Bach, 2019. "A survey of Islamic banking and finance literature: Issues, challenges and future directions," Pacific-Basin Finance Journal, Elsevier, vol. 53(C), pages 484-496.

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