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Islamic financial investments and economic growth evidence from emerging economy, United Arab Emirates

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  • Mosab I. Tabash

Abstract

The paper examines the role of Islamic banking investments in enhancing the emerging economic growth of United Arab Emirates (UAE). The study uses annual time series data to examine the relationship between the variables. Autoregressive distributed lag (ARDL) framework is utilised for co-integration along with error correction models. The findings indicate that in the long-term Islamic banks' investments have contributed to the economic growth of UAE. It shows that when Islamic investments increase, the economic growth also increases in a positive way. Granger causality test results depict a positive and statistically significant relationship between economic growth and Islamic banks' investments in both the short-run and in the long-run as well. It reveals that the causal relationship between Islamic banks' investments and the economic growth of UAE is a supply-leading direction. The paper concludes that the United Arab Emirates Government should support the growth of Islamic banks since they approve their impacts on the UAE economy.

Suggested Citation

  • Mosab I. Tabash, 2018. "Islamic financial investments and economic growth evidence from emerging economy, United Arab Emirates," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 15(1), pages 125-139.
    • Handle: RePEc:ids:ijecbr:v:15:y:2018:i:1:p:125-139
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    Cited by:

    1. Emam Ali Salman & Jais Juraifa Bte & Tabash Mosab I., 2019. "The role of tribalism as mediator between employee empowerment and organizational commitment in Yemeni Islamic banking sector," Management & Marketing, Sciendo, vol. 14(1), pages 130-149, March.
    2. Rajendra Maharjan, 2020. "Causality between Financial Development and Economic Growth in Nepal," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 32(2), pages 29-44, October.

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