Proceedings of The 14th International Conference on Management, Economics and Humanities
Year: 2023
DOI:
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Islamic Trade Financing and Poverty Mitigation: An Econometric Estimation Informing Islamic Development Bank Member Countries Considering Their Eentrepreneurial Ecosystems
Sennanda Musa, Ahmed Mutunzi Kitunzi
ABSTRACT:
This paper is an analysis of the empirical effect of the entrepreneurial ecosystems, to the relationship between Islamic Trade financing (TF) and the poverty trends in the context Islamic development bank (IsDB) member countries. Specifically, the study seeks to find out whether there is a statistically significant effect of the entrepreneurial ecosystems, measured as Global Entrepreneurship Index (GEI) Scores to the relationship between the Islamic Trade Financing dollar amounts by IsDB (TF) and the GNI Per Capita, PPP of 57 Islamic development bank (IsDB) member countries for the years 2015 to 2019. The research is a longitudinal, desk-top triangulation of correlation, regression, hypothesis-testing employing the linear dynamic panel data GMM model as an estimator of the empirical relationships between the key variables of the study. The study results show that there is a significant positive relationship between the IF dollar amounts from the IsDB and the GNI Per Capita, PPP and ascending entrepreneurial ecosystems positively affects this relationship in these 57 countries. Therefore, countries that receive higher Islamic Trade financing dollar amounts from the IsDB (IF), generally have more GNI Per Capita, PPP (less poverty) than their counterparts but ascending entrepreneurial ecosystem levels raises this positive relationship. It is, therefore, recommendable for countries to formulate policies that facilitate Islamic Trade financing to mitigate poverty and improve their entrepreneurial ecosystems for economic progress. This paper develops policy discussions regarding allocation of political attention to the policy topics on poverty mitigation, and their relation to financing trade Islamically, while improving the entrepreneurial environment, thus generate information on policy choices regarding the Islamic financing alternative.
keywords: Entrepreneurialship, Gross-National-Income, Islamic Trade financing, public policy, Poverty