Journal of Economics and Business Letters

Sharia global trade and sustainable economic growth: A narrative review of justice principles and ethical business

Nur Kholis — 2025-12-09

This study seeks to combine and assess the current body of work on the integration of Shariah principles into international trade and their potential contribution to sustainable economic growth. Utilizing a narrative review approach, this study synthesizes academic papers, books, policy documents, and case studies published between 2018 and 2025. A thematic analysis was conducted to explore the correlation between Shariah principles and such as justice (al-ʿadl), transparency (al-shafāfiyyah), the prohibition of riba, gharar, and maysir, and compliance with halal and thayyib standards—and the United Nations Sustainable Development Goals (SDGs), particularly SDG 8 (inclusive growth), SDG 10 (reduced inequalities), SDG 12 (responsible consumption and production), and SDG 16 (peace, justice, and strong institutions). The findings indicate significant opportunities in the expanding halal market, innovations in blockchain halal supply chains, and the standardization of cross-border halal certification. Furthermore, examples from the Islamic Development Bank (IsDB) and Nestlé demonstrate that Shariah-compliant practices can improve fairness, market access, and social welfare while also highlighting challenges such as regulatory fragmentation, limited global awareness of Islamic economics, and infrastructure shortcomings. This study contributes to the creation of an integrated framework linking Shariah economic principles with SDG goals in international trade policy, providing a conceptual guide for policymakers, trade organizations, and multinational companies. Future research should focus on sector-specific empirical applications, develop quantitative models to evaluate the effects of Shariah-compliant trade on sustainable development outcomes, and investigate technological innovations to align Islamic economic ethics with global sustainability objectives.

Causality analysis of military expenditure, economic growth, and exchange rate in Indonesia 2000 – 2023

Shaghi Ratu Sa'bani — 2025-12-12

This study investigates the long-term relationship and causal dynamics among military expenditure, economic growth, and exchange rate in Indonesia over the period 2000-2023 to provide empirical insight into whether defense spending functions as a catalyst for economic growth or merely reflects the country’s fiscal capacity. Using annual time-series data from the World Bank’s World Development Indicators, the analysis applies the Johansen cointegration and Granger causality tests to assess both equilibrium and directional linkages. Before estimation, all variables are expressed in natural logarithms and subjected to the Augmented Dickey–Fuller test to ensure robustness of the empirical results. The findings confirm one significant cointegration relationship, indicating a stable long-term relationship among the variables. Granger causality results identify a unidirectional causality from economic growth to military expenditure, and from military expenditure to the exchange rate. These findings suggest that Indonesia’s defense spending is primarily responsive to fiscal capacity while influencing exchange-rate stability. The study contributes to the defense economic literature by integrating defense spending with economic development strategies through domestic procurement, fiscal efficiency, and the strengthening of strategic industries to maximize multiplier effects on economic growth and maintain macroeconomic stability.

The relationship between defense R&D investment and the autonomy of the national defense industry

Immanuel A. Hutagaol — 2025-12-15

This study analyzes the relationship between research and development (R&D) investment in the defense sector and the autonomy of Indonesia’s national defense industry. Employing a qualitative approach based on a literature review and document analysis, this study examines theoretical frameworks, policy instruments, and empirical practices in Indonesia and selected comparator countries, including the roles of institutions such as KKIP, BRIN, and the Ministry of Defense. The main findings indicate that defense R&D investment plays a critical role in building technological capacity, strengthening domestic supply chains, increasing the local content ratio (TKDN), and promoting import substitution and technology transfer. However, key challenges persist, including limited funding, policy fragmentation, and underdeveloped human resources in defence R&D. Case studies of state-owned defense enterprises (PT Pindad, PT PAL, PT DI) illustrate the dynamics of innovation, international collaboration, and resulting economic multiplier effects. The study concludes that the success of defense R&D investment is highly dependent on policy synergy, sustainable funding, a robust innovation ecosystem, and developing high-quality human capital. Policy recommendations emphasize the need to increase R&D budget allocations, optimize triple helix collaboration, and implement regulatory reforms to accelerate the autonomy of the national defense industry.

Analysis of the implementation of defense economic policy in strengthening cyber capacity in Indonesia

Nurul Faizah Al Khoiriyah — 2025-12-22

Strengthening cyber capacity has become an important component of Indonesia's defense economic framework, along with the development of technology and increasing cyber threats that can affect economic stability and national security. This study aims to analyze the implementation of defense economic policies to strengthen Indonesia’s cyber capacity. The research method used a qualitative approach with a literature study through policy document analysis and budget data, applying George C. Edward III's policy implementation framework which focuses on four key variables: communication, resources, disposition, and bureaucratic structure. The results show that the integration of Indonesia’s defense, economic, and cyber policies has not been fully optimized. The findings indicate that without structural adjustments, the policy will remain normative. Therefore, an adaptive defense economic transformation is needed, placing cyber security as a strategic component by strengthening communication between institutions, increasing investment in human resources and technology, and synergy between defense institutions through bureaucratic simplification.