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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Main Authors:	Abduh, Muhamad, Omar, Mohd. Azmi
Format:	Article
Language:	English
Published:	Emerald Group Publishing 2012
Subjects:	BP173.75 Islam and economics HB131 Methodology.Mathematical economics. Quantitative methods HG1501 Banking
Online Access:	http://irep.iium.edu.my/23696/ http://irep.iium.edu.my/23696/ http://irep.iium.edu.my/23696/ http://irep.iium.edu.my/23696/1/Islamic_banking_%26_growth%2C_Indonesia.pdf

id	iium-23696
recordtype	eprints
spelling	iium-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 PeerReviewed 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
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	BP173.75 Islam and economics HB131 Methodology.Mathematical economics. Quantitative methods HG1501 Banking
spellingShingle	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/ http://irep.iium.edu.my/23696/ http://irep.iium.edu.my/23696/ http://irep.iium.edu.my/23696/1/Islamic_banking_%26_growth%2C_Indonesia.pdf
first_indexed	2023-09-18T20:35:49Z
last_indexed	2023-09-18T20:35:49Z
_version_	1777409038728822784

Islamic banking and economic growth: the Indonesian experience

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