Digital Amplifiers: Internet Penetration, Islamic Banking, and the Sustainable Development Goals

This paper asks whether digital infrastructure and Islamic banking are complements or substitutes in advancing the Sustainable Development Goals (SDGs). Using an annual panel of up to 57 countries over 2007-2024 (N = 846-1,026), the study estimates the association between Islamic banking depth (IBA, percentage of total banking assets), internet penetration, and their interaction on five SDG scores, using Method of Moments Quantile Regression (MMQR) as the primary estimator with Driscoll-Kraay, FGLS and PCSE as robustness checks. Three findings emerge. First, Islamic banking depth is positively and significantly associated with all five SDGs, most strongly with SDG9 (industry, innovation and infrastructure; median coefficient = 1.196, p < 0.01). Second, once internet penetration and an IBA*internet interaction are introduced, the interaction is positive and significant for SDG9 (b = 0.001, p < 0.01): the marginal association between Islamic banking depth and SDG9 is roughly 50 percent larger in a fully internet-penetrated economy than in one with no internet access. Third, this amplification is concentrated in the lower and middle quantiles of the SDG9 distribution and is goal-specific, appearing for SDG8 and SDG9 but not for SDG1, SDG7 or SDG10. The findings are directly relevant to Uzbekistan, which combines internet penetration near 90 percent with an Islamic banking sector that became legally permissible only in June 2026.