Skip to main content
SpringerLink
Log in

Rethinking Economic Crises in Islamic Perspective: Innovating Approach in Systematic Literature Review

  • Chapter
  • First Online:
Open Innovation in Small Business

Abstract

Business cycles or crises occur when the economy falls after prosperity (Schumpeter 1939) or when genuine insecurity increases volatility, uncertainty, and contradictions in several domains (Haralambie 2011). According to (Colander et al. 2009), crises have made mainstream economics a systemic failure. We use Islamic viewpoints to investigate the crises’ account. In this regard, many Muslim authors attribute the economic crisis to mainstream economic discipline's failure and suggest Islamic economics as a solution or alternative. We use a systematic literature review to evaluate 36 studies based on peer-reviewed journals and sources between 1990 and 2022. Banking and Finance, Economic Thinking, Spending and Consumption, and Human Resources and Governance were identified from the selected literature. It largely focuses on banking and finance, underlining the inherent flaws of the sector in the capitalist system and lessons for strengthening Islamic banking and finance to handle future cyclical shocks. The literature of other clusters in the review also shows that the lessons from the crisis have influenced Muslims’ consumption and spending decisions, including credit decisions, enrichment of Islamic economic thinking, and best practises to survive in crisis times for Muslims or Islamic institutions.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 99.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 129.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    Look in Dictionary of https://www.britannica.com.

References

  • Acemoglu D (2009) The crisis of 2008: lessons for and from economics. Crit Rev 21(2–3):185–194

    Article  Google Scholar 

  • Ahmed A (2010) Global financial crisis: an Islamic finance perspective. Int J Islam Middle East Financ Manag 3(4):306–320

    Google Scholar 

  • Ahmed H (2009) Financial crisis: risks and lessons for Islamic finance. ISRA Int J Islam Financ. Emerald Group Publishing Limited, UK

    Google Scholar 

  • Alam N, Rajjaque MS (2010) Shariah-compliant equities: empirical evaluation of performance in the European market during credit crunch. J Financ Serv Mark 15(3):228–240

    Article  Google Scholar 

  • Alqahtani F, Mayes DG (2018) Financial stability of Islamic banking and the global financial crisis: evidence from the gulf cooperation council. Econ Syst 42(2):346–360

    Article  Google Scholar 

  • Alqahtani F, Mayes DG, Brown K (2017) Islamic bank efficiency compared to conventional banks during the global crisis in the GCC region. J Int Finan Markets Inst Money 51:58–74

    Article  Google Scholar 

  • Alqahtani F, Mayes DG (2017) The global financial crisis and Islamic banking: the direct exposure to the crisis. Banks Bank Syst

    Google Scholar 

  • Arfah A, Olilingo FZ, Syaifuddin S, Dahliah D, Nurmiati N, Putra AHPK (2020) Economics during global recession: Sharia-economics as a post COVID-19 agenda. J Asian Financ, Econ Bus. Korea Distribution Science Association (KODISA), South Korea

    Google Scholar 

  • Arif M, Naeem MA, Hasan M, Alawi SM, Taghizadeh-Hesary F (2022) Pandemic crisis versus global financial crisis: are Islamic stocks a safe-haven for G7 markets? Econ Res-Ekon Istraz. Routledge Taylor and Francis Group, UK

    Google Scholar 

  • Ascarya A, Iskandar D (2017) The root causes of financial crisis in Islamic economic perspective. Ekonomi Islam 1930(02):1–11

    Google Scholar 

  • Ascarya (2017) The real determinants of financial crisis and how to resolve it in Islamic economics perspective of Eco. Int J Econ Res. Serials Publication, India

    Google Scholar 

  • Askari H, Mirakhor A (2015) The next financial crisis and how to save capitalism.

    Google Scholar 

  • Bakar O (1984) The question of methodology in Islamic science. Muslim Educ Q 2(1):16–30

    Google Scholar 

  • Barney J (1991) Firm resources and sustained competitive advantage. J Manag 17(1):99–120

    Google Scholar 

  • Bettany-Saltikov J, Cronin P (2013) How to do a systematic literature review in nursing. A step-by-step guide. Nurse education in practice, vol 13. McGraw-Hill Open University Press

    Google Scholar 

  • Bhattacharya S, Goodhart CAE, Tsomocos DP, Vardoulakis AP (2015) A Reconsideration of Minsky’s financial instability hypothesis. J Money, Credit, Bank 47(5):931–973

    Article  Google Scholar 

  • Bhuiyan AB, Ismail AG, Noor AHM, Solaiman M, Ali MJ (2020) Islamic economics methodology patterns of reasoning and the structure of theories. Int J Shari’ah Corp Governance Res 3(2):10–24

    Article  Google Scholar 

  • Bourkhis K, Nabi MS (2013) Islamic and conventional banks’ soundness during the 2007–2008 financial crisis. Rev Financ Econ 22(2):68–77

    Article  Google Scholar 

  • Boyer R (2013) The global financial crisis in historical perspective: an economic analysis combining Minsky, Hayek, Fisher, Keynes and the regulation approach. 3(3):93−139

    Google Scholar 

  • Budhwar P, Fadzil K (2000) Globalization, economic crisis and employment practices: lessons from a large Malaysian Islamic institution. Asia Pac Bus Rev 7(1):195–198

    Article  Google Scholar 

  • Causse G (2012) Islamic finance: an alternative finance or an antidote to the crisis of capitalism? In: International symposia in economic theory and econometrics. Emerald Group Publishing Limited, UK

    Google Scholar 

  • Chapra MU (2011) The global financial crisis: some suggestions for reform of the global financial architecture in the light of Islamic finance. In: Thunderbird international business review. John Wiley & Sons, US

    Google Scholar 

  • Chazi A, Syed LAM (2010) Risk exposure during the global financial crisis: the case of Islamic banks. Int J Islam Middle East Financ Manag. Emerald Group Publishing Limited, UK

    Google Scholar 

  • Chowdhury A, Żuk P (2018) From crisis to crisis: capitalism, chaos and constant unpredictability. Econ Labour Relat Rev 29(4):375–393

    Article  Google Scholar 

  • Colander D, Goldberg M, Haas A, Juselius K, Kirman A, Lux T, Sloth B (2009) The financial crisis and the systemic failure of the economics profession. Crit Rev 21(2–3):249–267

    Article  Google Scholar 

  • Cook DJ, Greengold NL, Ellrodt AG, Weingarten SR (1997a) The relation between systematic reviews and practice guidelines. Ann Intern Med 127(3):210–216

    Article  CAS  Google Scholar 

  • Cook DJ, Mulrow CD, Haynes RB (1997b) Systematic reviews: synthesis of best evidence for clinical decisions. Ann Intern Med 126(5):376–380

    Article  CAS  Google Scholar 

  • Dass MA (2016) Islamization of social sciences: a critique of contemporary scholars. Doctoral dissertation, Aligarh Muslim University

    Google Scholar 

  • Denyer D, Tranfield D (2009) Producing a systematic review. In: Buchanan DA, Bryman A (eds) The SAGE handbook of organizational research methods. The sage handbook of organizational research methods

    Google Scholar 

  • Dixon-Woods M, Bonas S, Booth A, Jones DR, Miller T, Sutton AJ, Young B (2006) How can systematic reviews incorporate qualitative research? a critical perspective. Qual Res 6(1):27–44

    Article  Google Scholar 

  • Djennas M (2016) Business cycle volatility, growth and financial openness: does Islamic finance make any difference? Borsa Istanbul Rev 16(3):121–145

    Article  Google Scholar 

  • Ejaz N, Khan H (2014) The underlying cause of the global financial crisis: an Islamic perspective. Econ Pap 33(1):45–54

    Article  Google Scholar 

  • Fakhfekh M, Hachicha N (2014) Return volatilities and contagion transmission between Islamic and conventional banks throughout the subprime crisis: evidence from the DCC-MGARCH model. Int J Manag Financ Account 6(2):133–145

    Google Scholar 

  • Farooq M, Zaheer S (2015) Are Islamic banks more resilient during financial panics? Pac Econ Rev 20(1):101–124

    Article  Google Scholar 

  • Furqani H, Haneef MA (2015) Methodology of Islamic economics: typology of current practices, evaluation and way forward. In: Islamic economics: theory, policy and social justice, vol 23

    Google Scholar 

  • Gough D, Oliver S, Thomas J (2017) An introduction to systematic reviews. Sage

    Google Scholar 

  • Haralambie G (2011) The global crisis and cyclical theory. Theoret Appl Econ 18(11)

    Google Scholar 

  • Hasan M, Dridi J (2011) The effects of the global crisis on Islamic and conventional banks: a comparative study. J Int Econ Commer Policy 2(2):163–200

    Article  Google Scholar 

  • Hassan A (2009) After the credit crunch: the future of Shari’ah compliant sustainable investing. Humanomics 25(4):285–296

    Article  Google Scholar 

  • Hassan MK, Khan A, Paltrinieri A (2021) Islamic finance: a literature review. In: Islamic finance and sustainable development: a sustainable economic framework for Muslim and Non-Muslim countries, pp 77–106

    Google Scholar 

  • Hoover KD (2016) The crisis in economic theory: a review essay. J Econ Lit 54(4):1350–1361

    Article  Google Scholar 

  • Hussain Gattoo M, Gattoo H (2017) Modern economics and the Islamic alternative: disciplinary evolution and current crisis. Int J Econ, Manag Account 25(2):173–203

    Google Scholar 

  • Hussien ME, Alam MM, Murad MW, Wahid A (2019) The performance of Islamic banks during the 2008 global financial crisis evidence from the Gulf cooperation council countries. J Islam Account Bus Res. Emerald Group Publishing Limited, UK

    Google Scholar 

  • Ibrahim MH, Rizvi SAR (2018) Bank lending, deposits and risk-taking in times of crisis: a panel analysis of Islamic and conventional banks. Emerg Mark Rev. Elsevier, Netherlands

    Google Scholar 

  • Imperia A, Maffeo V (2011) As if nothing were going to happen: a search in vain for warnings about the current crisis in economic journals with the highest impact factors impact factors: Andrea imperia and Vincenzo Maffeo. In: The global economic crisis: new perspectives on the critique of economic theory and policy, p 19. Routledge, London

    Google Scholar 

  • Islahi AA, Jeddah SA (2005) Contribution of Muslim scholars to economic thought and analysis. Scientfc Publisher Center, King Abdul Aziz University, Jeddah

    Google Scholar 

  • Karim WJ (2010) The economic crisis, capitalism and Islam: the making of a new economic order? Globalizations. Routledge Taylor and Francis Group, UK

    Google Scholar 

  • Kassim SH, Kamil S (2012) Performance of Islamic unit trusts during the 2007 global financial crisis: Evidence from malaysia. Asian Acad Manag J. Penerbit Universiti Sains Malaysia, Malaysia

    Google Scholar 

  • Kassim SH, Shabri M (2010) Impact of financial shocks on Islamic banks: Malaysian evidence during 1997 and 2007 financial crises. Int J Islam Middle East Financ Manag. Emerald Group Publishing Limited, UK

    Google Scholar 

  • Kayed RN, Hassan MK (2011) The global financial crisis and Islamic finance. Thunderbird Int Bus Rev 53:551–564. Springer

    Google Scholar 

  • Kenourgios D, Naifar N, Dimitriou D (2016) Islamic financial markets and global crises: contagion or decoupling? Econ Model. Elsevier, Netherlands

    Google Scholar 

  • Khan M (2013) What is wrong with Islamic economics? what is wrong with Islamic economics?

    Google Scholar 

  • Lawson T (2009) The current economic crisis: its nature and the course of academic economics. Camb J Econ 33(4 SPEC. ISS.):759–777

    Google Scholar 

  • Mahomedy AC (2013) Islamic economics: still in search of an identity. Int J Soc Econ 40(6):556–578

    Article  Google Scholar 

  • Mahomedy AC (2016) The ontological foundations of modern economics and Islam: how do they compare. https://saef.ukzn.ac.za/

  • Malkawi M (2020) Fall of capitalism and rise of Islam. https://books.google.com/

  • Matthews R, Tlemsani I (2010) The financial tower of babel: roots of crisis. Int J Islam Middle East Financ Manag. Emerald Group Publishing Limited, UK

    Google Scholar 

  • Michail N (2021) Financial instability BT-money, credit, and crises: understanding the modern banking dystem. In: Michail N (ed), pp 137–154. Springer International Publishing, Cham

    Google Scholar 

  • Mirakhor A, Askari H (2017) Ideal Islamic economy: an introduction. Springer

    Book  Google Scholar 

  • Moisseron JY, Teulon F (2014) Is morality-based Islamic economics an answer to the global financial crisis? J King Abdulaziz Univ, Islam Econ. King Abdulaziz University Scientific Publishing Center, Saudi Arabia

    Google Scholar 

  • Mukit MMH, Nabila NJ, Abdel-Razzaq AI, Shaznin KF (2021) The economic influence on consumers buying behavior in Islamic countries: evidence from the COVID-19 economic crisis. Economics. Germany. https://www.degruyter.com/.

  • Olson D, Zoubi T (2017) Convergence in bank performance for commercial and Islamic banks during and after the global financial crisis. Q Rev Econ Financ. Netherlands, Elsevier

    Google Scholar 

  • Othman R, Aris NA, Azli RM, Arshad R (2012) Islamic banking: the firewall against the global financial crisis. J Appl Bus Res. The Clute Institute, US

    Google Scholar 

  • Parashar SP, Venkatesh J (2010) How did Islamic banks do during global financial crisis? Banks Bank Syst 5(4):54–62

    Google Scholar 

  • Petticrew M, Roberts H (2008) Systematic reviews in the social sciences: a practical guide. Syst Rev Soc Sci: Pract Guid 4(4):1–336

    Google Scholar 

  • Pryor FL (2007) The economic impact of Islam on developing countries. World Dev 35(11):1815–1835. https://doi.org/10.1016/j.worlddev.2006.12.004

    Article  Google Scholar 

  • Rehman SS, Askari H (2010) How Islamic are Islamic countries? Glob Econ J 10(2)

    Google Scholar 

  • Rosman R, Wahab NA, Zainol Z (2014) Efficiency of Islamic banks during the financial crisis: an analysis of middle eastern and Asian countries. Pac Basin Financ J. Elsevier, Netherlands

    Google Scholar 

  • Schumpeter JA (1939) Business cycles, vol 1. Mcgraw-hill, New York, pp 161–174

    Google Scholar 

  • Siddiqi MN, Chapra MU, Khan MF, Seidu AM, Masri RYA, Metwally MM (2009) Issues in the international financial crisis from an Islamic perspective. Islamic economic research center. King Abdulazis University, Jeddah

    Google Scholar 

  • Smolo E, Mirakhor A (2010) The global financial crisis and its implications for the Islamic financial industry. Int J Islam Middle East Finance

    Google Scholar 

  • Sweet M, Moynihan R (2007) Improving population health; the uses of systematic reviews

    Google Scholar 

  • Thomas I (2009) Hypothesis as an explanation of the crisis working paper, vol 11.

    Google Scholar 

  • Trabelsi M (2011) The impact of the financial crisis on the global economy: can the Islamic financial system help? J Risk Financ 12(1):15–25

    Article  Google Scholar 

  • Trad N, Rachdi H, Hakimi A, Guesmi K (2017) Banking stability in the MENA region during the global financial crisis and the European sovereign debt debacle. J Risk Financ. Emerald Group Publishing Limited, UK

    Google Scholar 

  • Tranfield D, Denyer D, Smart P (2003) Towards a methodology for developing evidence-informed management knowledge by means of systematic review*. Br J Manag 14(3):207–222

    Article  Google Scholar 

  • Vali S, Nasr R, Vali S, Nasr R (2014) Islamization of knowledge: a critical overview. Islam Stud 30(3):387–400

    Google Scholar 

  • Visser H (2019) The Islamic economy: its origin, its world view and its claims. Cent Eur Rev Econ Manag 3(4):53–89

    Google Scholar 

  • Whalen CJ (2011) Financial instability and economic security after the great recession. Edward Elgar Publishing.

    Google Scholar 

  • Wolf FM, Shea JA, Albanese MA (2001) Toward setting a research agenda for systematic reviews of evidence of the effects of medical education. Teach Learn Med 13(1):53–60

    Article  Google Scholar 

  • Zaimovic A, Dedovic L (2021) World economy and Islamic finance: comparison of government policies during the global financial crisis and the COVID-19 crisis. J King Abdulaziz Univ, Islam Econ 34(1):79–92

    Article  Google Scholar 

  • Zakaria RH, Kader RA, Jaafar NIM, Marican S (2012) Burgeoning household debt: an Islamic economic perspective. Middle East J Sci Res. International Digital Organization for Scientific Information, Pakistan

    Google Scholar 

Download references

Acknowledgements

This research was made possible by the support of the Research and Service to Community Institute (LP3M) of the Raja Ali Haji Maritime University, based in Tanjungpinang of the Riau Islands, Indonesia.

Author information

Authors and Affiliations

  1. Economics Doctorate Department, Faculty of Economics and Business, Universitas Brawijaya, Malang, Indonesia

    Winata Wira, Umar Burhan, Asfi Manzilati &  Multifiah

  2. Faculty of Maritime Economics and Business, Universitas Maritim Raja Ali Haji, Tanjungpinang, Indonesia

    Winata Wira

Authors
  1. Winata Wira
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Umar Burhan
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Asfi Manzilati
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Multifiah
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Winata Wira .

Editor information

Editors and Affiliations

  1. Universitas Medan Area, Medan, Indonesia

    Ahmad Rafiki

  2. ICD Business School of Paris, Groupe IGS, Halifax, NS, Canada

    Léo-Paul Dana

  3. Universitas Pembangunan Panca Budi, Medan, Indonesia

    Muhammad Dharma Tuah Putra Nasution

Appendix 1 Journal publishers and country

Appendix 1 Journal publishers and country

Publishers

Number of studies selected

Country base

Emerald group publishing limited

11

UK

Elsevier

6

Netherlands

Routledge Taylor and Francis group

3

UK

John Wiley & Sons

2

USA

King Abdulaziz university scientific publishing center

2

Saudi Arabia

Wiley online library

2

USA

Borsa Istanbul Anonim Sirketi

1

Turkiye

Bussiness perspectives

1

Ukraine

https://www.degruyter.com

1

Germany

Inderscience publishers

1

Switzerland

International digital organization for scientific information

1

Pakistan

Macmillan publishers Ltd

1

UK

Penerbit Universiti sains Malaysia

1

Malaysia

Serials publication

1

India

The clute institute

1

USA

World scientific publishing company

1

Singapore

Rights and permissions

Reprints and permissions

Copyright information

© 2023 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Wira, W., Burhan, U., Manzilati, A., Multifiah (2023). Rethinking Economic Crises in Islamic Perspective: Innovating Approach in Systematic Literature Review. In: Rafiki, A., Dana, LP., Nasution, M.D.T.P. (eds) Open Innovation in Small Business. Contributions to Environmental Sciences & Innovative Business Technology. Springer, Singapore. https://doi.org/10.1007/978-981-99-5142-0_14

Download citation

Publish with us

Policies and ethics

Search

Navigation