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REACTION OF ISLAMIC STOCK MARKET TO MACROECONOMIC VARIABLES: A STUDY OF INDIA AND INDONESIA

JEBIS (Jurnal Ekonomi dan Bisnis Islam) · Vol. 7 No. 1 (2021) · pp. 148–162

DOI
10.20473/jebis.v7i1.25921
ISSN
2527-3027, 2442-6563
Published
2021-06-30
Publisher
Universitas Airlangga
Language
eng
License
creativecommons.org/licenses/by-nc-sa/4.0

Abstract

India and Indonesia are among the world-largest democracies, having a strong international presence through involvement in various economic and intergovernmental organizations such as in the E7 countries and G20 countries groups. This study aims to identify the impact of macroeconomic variables on the Islamic stock markets of India and Indonesia. Two Islamic stock market indices are considered: the Indian Bombay Stock Exchange (BSE) Shariah Index and the Indonesian Jakarta Islamic Index (JII). At the same time, the macroeconomic variables are foreign direct investment (FDI), import, export, gross domestic product (GDP), broad money (M3), and exchange rate (ER). The study adopts panel regression analysis on yearly data covering the period from 2011 to 2020. The pooled OLS regression model, fixed effect regression model (FEM), and random effect regression model (REM) have been employed. With the REM model being suggested as the most suitable model through the Hausman test, the results suggest that FDI, export, GDP, and ER have shown positive and statistically significant influence on both the BSE Shariah and JII. It is also shown that the macroeconomic variables of India and Indonesia are heterogeneities in nature and having mean distribution effects. The study's findings suggest that increasing the possibilities of bilateral trade and investment in the sectors such as health and pharmaceuticals, automotive components, information technology, agro products, and tourism between India and Indonesia will go a long way. It is expediting greater economic activities among these two countries.

Keywords

Collaboration network of the authors

28 authors · 46 co-authorship links · 6 across different organisations

Hover or tap a name to highlight its co-authors. Double-click to open the author's page.

  • International Islamic University Malaysia
  • Kingdom University
  • Christ University
  • IPB University
  • Affiliation unknown
  • Different organisations
  • Same organisation
  • Affiliation unknown
  • Thicker line = more joint articles · bigger circle = more articles
Show as table
Co-authorOrganisationJoint articles
Laily Dwi ArsyiantiIPB University2
Adewale Abideen AdeyemiInternational Islamic University Malaysia2
Muh Zul Hazmi RapiAffiliation unknown2
Jarita DuasaInternational Islamic University Malaysia1
M. Shabri Abd. MajidInternational Islamic University Malaysia1
Zakir Hossen ShaikhKingdom University1
Naji Mansour NomranKingdom University1
Joji AbeyKingdom University1
Khalifah Muhamad AliAffiliation unknown1
Sylva Alif RusmitaAffiliation unknown1
Norzitah Abdul KarimAffiliation unknown1
Syed Musa Syed Jaafar AlhabshiAffiliation unknown1
Razali HaronAffiliation unknown1
Hechem AjmiAffiliation unknown1
Hassanuddeen Abdul AzizAffiliation unknown1
Walid MansourAffiliation unknown1
Lina Nugraha RaniAffiliation unknown1
Permata WulandariAffiliation unknown1
Adhitya GinanjarAffiliation unknown1
Achmad HidayatAffiliation unknown1
Nur Farhah MahadiAffiliation unknown1
Muhammad-Bashir Owolabi YusufAffiliation unknown1
Syarah Syahira Binti Mohd YusoffAffiliation unknown1

Affiliations come from OpenAlex; journal OAI-PMH metadata carries none. Authors without an OpenAlex ID are matched by name, which can merge or split people.

Metadata source: OAI-PMH (metadata jurnal) https://e-journal.unair.ac.id/JEBIS/oai, first harvested 8 Nov 2026, last seen 8 Nov 2026.
Original metadata (oai_dc) 
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	<dc:title xml:lang="en-US">REACTION OF ISLAMIC STOCK MARKET TO MACROECONOMIC VARIABLES: A STUDY OF INDIA AND INDONESIA</dc:title>
	<dc:creator>Irfan, Mohammad</dc:creator>
	<dc:creator>Kassim, Salina</dc:creator>
	<dc:creator>Dhimmar, Sonali</dc:creator>
	<dc:creator>Zahid, Mohd</dc:creator>
	<dc:creator>Fuadi, Nasrul Fahmi Zaki</dc:creator>
	<dc:subject xml:lang="en-US">BSE Shariah</dc:subject>
	<dc:subject xml:lang="en-US">Jakarta Islamic Index</dc:subject>
	<dc:subject xml:lang="en-US">Macroeconomic Variables</dc:subject>
	<dc:subject xml:lang="en-US">Panel Regression</dc:subject>
	<dc:subject xml:lang="en-US">Islamic Stock Market</dc:subject>
	<dc:description xml:lang="en-US">India and Indonesia are among the world-largest democracies, having a strong international presence through involvement in various economic and intergovernmental organizations such as in the E7 countries and G20 countries groups. This study aims to identify the impact of macroeconomic variables on the Islamic stock markets of India and Indonesia. Two Islamic stock market indices are considered: the Indian Bombay Stock Exchange (BSE) Shariah Index and the Indonesian Jakarta Islamic Index (JII). At the same time, the macroeconomic variables are foreign direct investment (FDI), import, export, gross domestic product (GDP), broad money (M3), and exchange rate (ER). The study adopts panel regression analysis on yearly data covering the period from 2011 to 2020. The pooled OLS regression model, fixed effect regression model (FEM), and random effect regression model (REM) have been employed. With the REM model being suggested as the most suitable model through the Hausman test, the results suggest that FDI, export, GDP, and ER have shown positive and statistically significant influence on both the BSE Shariah and JII. It is also shown that the macroeconomic variables of India and Indonesia are heterogeneities in nature and having mean distribution effects. The study's findings suggest that increasing the possibilities of bilateral trade and investment in the sectors such as health and pharmaceuticals, automotive components, information technology, agro products, and tourism between India and Indonesia will go a long way. It is expediting greater economic activities among these two countries.</dc:description>
	<dc:publisher xml:lang="en-US">Universitas Airlangga</dc:publisher>
	<dc:date>2021-06-30</dc:date>
	<dc:type>info:eu-repo/semantics/article</dc:type>
	<dc:type>info:eu-repo/semantics/publishedVersion</dc:type>
	<dc:type xml:lang="en-US">Peer-reviewed Article</dc:type>
	<dc:format>application/pdf</dc:format>
	<dc:identifier>https://e-journal.unair.ac.id/JEBIS/article/view/25921</dc:identifier>
	<dc:identifier>10.20473/jebis.v7i1.25921</dc:identifier>
	<dc:source xml:lang="en-US">Jurnal Ekonomi dan Bisnis Islam (Journal of Islamic Economics and Business); Vol. 7 No. 1 (2021): JANUARY-JUNE 2021; 148-162</dc:source>
	<dc:source>2527-3027</dc:source>
	<dc:source>2442-6563</dc:source>
	<dc:language>eng</dc:language>
	<dc:relation>https://e-journal.unair.ac.id/JEBIS/article/view/25921/14708</dc:relation>
	<dc:rights xml:lang="en-US">Copyright (c) 2021 JEBIS (Jurnal Ekonomi dan Bisnis Islam)</dc:rights>
	<dc:rights xml:lang="en-US">http://creativecommons.org/licenses/by-nc-sa/4.0</dc:rights>
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