The effect of Islamic banks on GDP growth: Some evidence from selected MENA countries

Boukhatem, Jamel and Moussa, Fatma Ben,(2018), The effect of Islamic banks on GDP growth: Some evidence from selected MENA countries. , Borsa Istanbul Review, UNSPECIFIED

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The purpose of this paper is twofold. First, it seeks to establish a consistent theoretical framework for the relationship between Islamic finance and economic growth. Second, it attempts to assess empirically the effect that Islamic banking loans had on the economic growth of 13 countries in the MENA region during the 2000e2014 period. We found strong evidence to suggest that financial system development stimulated economic growth in the selected MENA countries over the studied period. Furthermore, we found that while Islamic financial development can boost economic growth, this positive effect is hindered by underdeveloped institutional frameworks. In addition, net-oil-exporting MENA countries do not appear to benefit from large oil-fueled deposits that are likely to increase the scale of loans. The findings suggest that governments should consider implementing proactive and favorable economic and institutional policies that are geared toward Islamic finance. Copyright © 2017, Borsa _Istanbul Anonim S¸ irketi. Production and hosting by Elsevier B.V. This is an open access article under the CC BY-NCND license
Keywords : Islamic banking; Economic growth; MENA region; Westerlund (2007) panel cointegration test; FMOLS, UNSPECIFIED
Journal or Publication Title: Borsa Istanbul Review
Volume: 18
Number: 3
Item Type: Article
Subjects: Ekonomi Islam
Depositing User: Nila Nurjanah
Date Deposited: 20 Dec 2019 04:03
Last Modified: 27 Dec 2019 08:04

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