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Empirical Analysis of Islamic Banking and Economic Growth

Author

Listed:
  • Melloul Anass

    (University Mohamed V, Rabat, Morocco)

  • Chaik Saif Eddine

    (University Mohamed V, Rabat, Morocco)

  • Oujgha Reda

    (University Mohamed V, Rabat, Morocco)

Abstract

The last decades have been characterized by sustained economic growth in which the financial system has played a crucial role. Banks have been at the center of this development and have undergone a profound change. Indeed, the emergence of Islamic finance and its place internationally justify the question of its role as a real generator of financial intermediation. In this context, the purpose of this paper is to examine the relationship between Islamic financial model evaluated by Banks Islamic and economic growth. Via a study the in a sample of nine countries, the Islamic Bank system was developed during the period (2008-2014), by employing the Panel Model to see the link between financial development and economic growth. We use time series data of Islamic financial expressed by the following independent variables (total Islamic Bank assets, investment accounts and financial assets, Cost to income ratio, Non-financial income ratio, income on asset ratio). Moreover, real GDP per capita as dependent variable has been used. An Econometric Modelling by the Generalized Method of Moments (GMM) of some indicators and the index of economic growth GDP Consequently, our study confirms the existence of a positive correlation but not strong, enough for the size of Islamic banks in this sample, and weight in the financial system that remains average compared to conventional banks.

Suggested Citation

  • Melloul Anass & Chaik Saif Eddine & Oujgha Reda, 2017. "Empirical Analysis of Islamic Banking and Economic Growth," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 89-102, March.
    • Handle: RePEc:nwe:eajour:y:2017:i:1:p:89-102
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    References listed on IDEAS

    as
    1. Imam, Patrick & Kpodar, Kangni, 2016. "Islamic banking: Good for growth?," Economic Modelling, Elsevier, vol. 59(C), pages 387-401.
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    8. World Bank, 2013. "World Development Indicators 2013," World Bank Publications - Books, The World Bank Group, number 13191, December.
    9. World Bank, 2010. "World Development Indicators 2010," World Bank Publications - Books, The World Bank Group, number 4373, December.
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    More about this item

    Keywords

    economic growth; financial development; Islamic Bank; Econometric Modeling;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General

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