Islamic Profit-Sharing Finance and Sustainable Profitability: A Temporal Study Across Pre-, During-, and Post-COVID-19 Periods

DOI

10.2991/978-94-6463-990-2_37How to use a DOI?

Keywords

Islamic Profit-Sharing Finance; Sustainable Profitability; Covid-19

Abstract

This study investigates the impact of Islamic profit-sharing finance, specifically Mudharabah and Musyarakah, on profit-sharing income and sustainable profitability of Islamic banks across three temporal phases: pre-COVID-19, during COVID-19, and post-COVID-19. Using monthly secondary data from 13 Indonesian Islamic banks covering the period 2014 to 2023, the study applies Partial Least Squares Structural Equation Modeling (SEM-PLS) to examine the dynamic relationships among financing contracts, income, and net profit. The results reveal that in the pre-pandemic period, both financing contracts had limited influence on income and profitability. During the COVID-19 crisis, Musyarakah financing significantly affected both income and profit, while Mudharabah showed no significant impact. In the post-pandemic period, both financing modes demonstrated strong and significant effects, and profit-sharing income emerged as a key driver of net profit. These findings suggest that Islamic profit-sharing instruments—when managed effectively—can support financial resilience and long-term profitability, contributing to the broader agenda of sustainable development in Islamic finance.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Luftianto Luftianto
AU  - Setiawan Setiawan
AU  - Ira Novianty
AU  - Lina Herliana
AU  - Nova Aulia Khoirunnisa
PY  - 2026
DA  - 2026/02/13
TI  - Islamic Profit-Sharing Finance and Sustainable Profitability: A Temporal Study Across Pre-, During-, and Post-COVID-19 Periods
BT  - Proceedings of the 7th International Conference on Applied Economics and Social Science (ICAESS 2025)
PB  - Atlantis Press
SP  - 557
EP  - 566
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-990-2_37
DO  - 10.2991/978-94-6463-990-2_37
ID  - Luftianto2026
ER  -