Investigating the Role of Sukuk in the Relationship between Inequality and Economic Growth in the Provinces of Iran: The Approach of Panel Data ARDL

Document Type : Scientific paper

Authors

1 Department, of Economics, Faculty of Management, Economic, and Accounting, Islamic Azad University of Tabriz, Iran

2 ,Department of Economics, Faculty of Management, Economics, and Accounting, Islamic Azad University of Tabriz, Iran.

10.22080/mrl.2025.27991.2126

Abstract

In recent decades, achieving economic growth has become one of the most important goals of developing countries. The first step to increase economic growth is reducing poverty among different classes of society. In this regard, the existence of a sound financial system can help improve economic growth by reducing poverty and inequality and increasing domestic production. Now, according to the sanctity of Riba and other Islamic financial principles in countries like Iran, the development and issuance of Sukuk as an alternative to conventional financing instruments is of special importance. Therefore, according to the importance of economic growth and the undeniable impact of inequality on it on the one hand, and the necessity of evaluating the role of Islamic financing tools (Sukuk) in economy on the other hand, the purpose of this study is to investigate the mediating role of Sukuk issuance in the relationship between income inequality and economic growth in the provinces of Iran during the period of 1387-1401 applying ARDL panel data method. The results of this study show that reducing income inequality increases economic growth in the short and long term, and the issuance of Sukuk also strengthens this reverse effect. In addition, an increase in human and physical capital in the provinces of Iran leads to increased economic growth. Trade openness also has a positive effect on the economic growth.

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History

  • Receive Date: 06 November 2024
  • Revise Date: 21 January 2025
  • Accept Date: 04 February 2025

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