Islamic Banking Financing Effect on Growth
Islamic Banking and Finance Review
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Title |
Islamic Banking Financing Effect on Growth
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Creator |
Afia Mushtaq
Noman Arshed Dr. Rukhsana Kalim |
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Subject |
Islamic banking
economic growth Islamic banking products |
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Description |
The study is an attempt to explore the transmission channel through which development in Islamic banking could lead to economic growth. In order to determinethis transmission mechanism, the estimation based Vector Error Correction model (VECM) is used. This study has tested Murabaha, Ijarah and Diminishing Musharaka as proposed Islamic financial products because of their majority share in Islamic financing. This study has tested two co-integrated systems in the VECM model. The first system tests the effect of an increase in financing in Islamic banking products on the net financing of Islamic banks and the second system tests the effect of net financing of Islamic banks on economic growth. The results indicate that the financing done by Islamic banking products positively affects economic growth in Pakistan. Also, the net financing of Islamic banks is significantly based on financing in Ijarah and Murabaha. Hence, this study highlights the growth potential of Islamic banking which is gaining shares in the overall banking system of Pakistan.
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Publisher |
Department of Banking and Finance, University of Management & Technology, Lahore, Pakistan
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Date |
2018-12-12
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Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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Format |
application/pdf
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Identifier |
https://journals.umt.edu.pk/index.php/IBFR/article/view/173
10.32350/ibfr.2018.05.05 |
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Source |
Islamic Banking and Finance Review; Vol 5 (2018): IBFR 1439-40H/2018; 69-87
2221-5239 2413-2977 |
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Language |
eng
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Relation |
https://journals.umt.edu.pk/index.php/IBFR/article/view/173/174
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Rights |
Copyright (c) 2018 Islamic Banking and Finance Review (IBFR)
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