Study the Effect of Islamic Contracts on Income Distribution in the Provinces of Iran Using the Panel Data Approach Case Study (interest-free loan, installment sales and hire-purchase)

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Document Type : Scientific research

Authors

1 aulul bayt university

2 ahlul bayt international university

3 abu university

Abstract

Given that the issue of income distribution is one of the most important economic issues in any society and the religion of Islam has paid particular attention to economic justice and equitable distribution of income. The present study has investigated the effect of Islamic Contracts on Inequality of Income Distribution using data from 31 provinces of Iran through panel data method. In order to achieve this goal, the research model has been estimated using Islamic Contracts such as interest-free loan, installment sales and hire-purchase by using E-Views9 software using fixed effects method. The results show that the selected Islamic indicators have a significant negative impact on income distribution inequality. The inverse U relation between GDP per capita and income distribution inequality is also confirmed. Labor productivity has a negative effect, and government spending and inflation rate have a positive effect on income inequality. It is proposed that the government provide conditions to facilitate access to Islamic finance for low-income people.

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