Islamic banking and economic growth: the Indonesian experience
Purpose – The purpose of this paper is to examine the short-run and the long-run relationships between Islamic banking development and economic growth in the case of Indonesia. Design/methodology/approach – Using quarterly data (2003:1-2010:2), this paper utilizes the bound testing approach o...
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2012
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my.iium.irep.236962012-05-07T00:58:59Z http://irep.iium.edu.my/23696/ Islamic banking and economic growth: the Indonesian experience Abduh, Muhamad Omar, Mohd. Azmi BP173.75 Islam and economics HB131 Methodology.Mathematical economics. Quantitative methods HG1501 Banking Purpose – The purpose of this paper is to examine the short-run and the long-run relationships between Islamic banking development and economic growth in the case of Indonesia. Design/methodology/approach – Using quarterly data (2003:1-2010:2), this paper utilizes the bound testing approach of cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework. Findings – The results demonstrate a significant relationship in short-run and long-run periods between Islamic financial development and economic growth. The relationship, however, is neither Schumpeter’s supply-leading nor Robinson’s demand-following. It appears to be bi-directional relationship. Originality/value – This paper uses empirical evidence to show the role of Islamic banks’ financing towards economic performance of a country.To the best of the authors’ knowledge, the study on the role of Islamic banking development towards economic growth is limited, particularly in the context of Indonesia. Keywords: Indonesia, Islam, Banking, Islamic banking, Islamic finance, Economic growth Emerald Group Publishing 2012-01 Article REM application/pdf en http://irep.iium.edu.my/23696/1/Islamic_banking_%26_growth%2C_Indonesia.pdf Abduh, Muhamad and Omar, Mohd. Azmi (2012) Islamic banking and economic growth: the Indonesian experience. International Journal of Islamic and Middle Eastern Finance and Management, 5 (1). pp. 35-47. ISSN 1753-8394 http://www.emeraldinsight.com/journals.htm?articleid=17024832 10.1108/17538391211216811 |
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BP173.75 Islam and economics HB131 Methodology.Mathematical economics. Quantitative methods HG1501 Banking |
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BP173.75 Islam and economics HB131 Methodology.Mathematical economics. Quantitative methods HG1501 Banking Abduh, Muhamad Omar, Mohd. Azmi Islamic banking and economic growth: the Indonesian experience |
description |
Purpose –
The purpose of this paper is to examine the short-run and the long-run relationships between Islamic banking development and economic growth in the case of Indonesia.
Design/methodology/approach –
Using quarterly data (2003:1-2010:2), this paper utilizes the bound testing approach of cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework.
Findings –
The results demonstrate a significant relationship in short-run and long-run periods between Islamic financial development and economic growth. The relationship, however, is neither Schumpeter’s supply-leading nor Robinson’s demand-following. It appears to be bi-directional relationship.
Originality/value –
This paper uses empirical evidence to show the role of Islamic banks’ financing towards economic performance of a country.To the best of the authors’ knowledge, the study on the role of Islamic banking development towards economic growth is limited, particularly in the context of Indonesia.
Keywords: Indonesia, Islam, Banking, Islamic banking, Islamic finance, Economic growth |
format |
Article |
author |
Abduh, Muhamad Omar, Mohd. Azmi |
author_facet |
Abduh, Muhamad Omar, Mohd. Azmi |
author_sort |
Abduh, Muhamad |
title |
Islamic banking and economic growth: the Indonesian
experience |
title_short |
Islamic banking and economic growth: the Indonesian
experience |
title_full |
Islamic banking and economic growth: the Indonesian
experience |
title_fullStr |
Islamic banking and economic growth: the Indonesian
experience |
title_full_unstemmed |
Islamic banking and economic growth: the Indonesian
experience |
title_sort |
islamic banking and economic growth: the indonesian
experience |
publisher |
Emerald Group Publishing |
publishDate |
2012 |
url |
http://irep.iium.edu.my/23696/1/Islamic_banking_%26_growth%2C_Indonesia.pdf http://irep.iium.edu.my/23696/ http://www.emeraldinsight.com/journals.htm?articleid=17024832 |
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1643608634430586880 |
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13.18916 |