Article Sidebar

Submitted
August 12, 2018
Accepted
January 17, 2019
Published
April 30, 2019
Download
PDF Untitled
Statistic
Read Counter : 4559 Download : 2512

Downloads

Download data is not yet available.

Main Article Content

Abstract

Islamic finance, which may have been considered only in the context of a multitude of trading structures among economists, merits a fresh evaluation in how it dovetails with and supports national economic growth. This study examines the dynamic interaction between Islamic financing and economic growth of Pakistan by employing the unit root test, cointegration test and Granger Causality tests to see whether the Islamic financial system influences the economic growth.  For the analysis, time series data of total Islamic financing and real GDP per capita, Islamic financial assets, and population to represent real economic sector were considered. Findings/Originality: This paper finds that a well-functioning Islamic financial system promotes economic growth. It also finds an evidence of a bidirectional relationship between Islamic asset financing and population. It implies that population reinforces Islamic finance, and population attracts Islamic financing.

Keywords

Ethical finance economic growth Islamic finance econometric Analysis Pakistan and Islamic finance

Article Details

License

Authors who publish with this journal agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-ShareAlike 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
  2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
  3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).

Creative Commons License

Economic Journal of Emerging Markets by Center for Economic Studies, Universitas Islam Indonesia is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

How to Cite
Nawaz, H., Abrar, M., Salman, A., & Bukhari, S. M. H. (2019). Beyond finance: Impact of Islamic finance on economic growth in Pakistan. Economic Journal of Emerging Markets, 11(1), 8–18. https://doi.org/10.20885/ejem.vol11.iss1.art2
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX

References

  1. Abduh, M., & Chowdhury, N. T. (2012). Does Islamic banking matter for economic growth in Bangladesh. Journal of Islamic Economics, Banking, and Finance, 8(3), 104-113.
  2. Abduh, M., & Omar, M. A. (2012). Islamic banking and economic growth: the Indonesian experience. International Journal of Islamic and Middle Eastern Finance and Management, 5(1), 35-47.
  3. Ahmad, K. (2000). Islamic finance and banking: the challenge and prospects. Review of Islamic Economics, 57-82.
  4. Asutay, M. (2012). Conceptualizing and locating the social failure of Islamic finance: aspirations of Islamic moral economy vs. the realities of Islamic finance. Asian and African area studies., 11(2), 93-113.
  5. Aziz, D. Z. (2012). Islamic finance in a challenging economy – moving forward. Paper presented at the 2nd International Shari'ah Research Academy for Islamic Finance (ISRA) Colloquium, Kuala Lumpur, Malaysia.
  6. Ben Jedidia Khoutem, B. A. N. (2012). Research at Unité de Recherche en Economie de Dévelopement (URED), FSEG Sfax.
  7. Board, I. F. S. (2017). Islamic financial services industry report. Retrieved from Kuala Lumpur, Malaysia: http://www.ifsb.org/docs/IFSB%20IFSI%20Stability%20Report%202017.pdf
  8. Bukhari, S. M. H., Nawaz, H., Imam, A., & Qadri, M. M. (2014). Religious aspects of finance promise: evidence from Pakistan. Science International-Lahore, 26(5), 2471-2475.
  9. Bukhari, S. M. H., Nawaz, H., & Sair, A. (2014). Compliance of Investment Sukuk with Shariah. Science International -Lahore.
  10. Caprio, G., & Honohan, P. (2001). Finance for growth: policy choices in a volatile world (Vol. 1): World Bank Publications.
  11. Cihak, M., & Hesse, H. (2008). Islamic banks and financial stability: An empirical analysis. IMF Working Papers, 1-29.
  12. El Qorchi, M. (2005). Islamic finance gears up. Finance and Development, 42(4), A Qearterly Magazine of the IMF.
  13. Feldstein, M. S., & Horioka, C. Y. (1979). Domestic savings and international capital flows. In: National Bureau of Economic Research Cambridge, Mass., USA.
  14. Furqani, H., & Mulyany, R. (2009). Islamic banking and economic growth: empirical evidence from Malaysia. Journal of Economic Cooperation and Development, 30(2), 59-74.
  15. Hassan, m. K. (2014). Islamic finance, sustainable development with finanicial inclusion, Univeristy of new orleans.
  16. Kuwait Finance House (2011). Global Sukuk Report 3Q 2011. October 2011
  17. Johansen, S., & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration—with applications to the demand for money. Oxford Bulletin of Economics and statistics, 52(2), 169-210.
  18. Johnson, K. (2013). The Role of Islamic Banking in Economic Growth. CMC Senior Theses Paper 642, Claremont McKenna College.
  19. Khoutem, B. J., & Nedra, B. A. (2012). Islamic Participative Financial Intermediation and Economic Growth. Journal of Islamic Economics, Banking and Finance, 3(8), 44-59.
  20. Kpodar, K., & Imam, P. A. (2010). Islamic banking: how has it diffused? IMF Working Papers, 1-29.
  21. Lipper. (2014 ). Fundmarket insight report. The Thomson Reuters Company.
  22. Mcaughtry, L. (2014). Islamic Finance news Guide 2014. UAE Retrieved from www.IslamicFinanceNews.com.
  23. Mehmood, A. (2002). Islamisation of economy in Pakistan: past, present and future. Islamic studies, 41(4), 675-704.
  24. Mohieldin, M. (2012). Realizing the Potential of Islamic Finance. Economic Premise, No. 77, Washington D.C., World Bank
  25. Nawaz, H. N. (2017). Perceptions And Acceptance Of Islamic Banking in Pakistan. International Sciences of Management Journal, 2(2), 1-14.
  26. Nguena, C. L. (2013). Inclusive and Pro-Poor Financial System in Africa: Does Islamic Finance Development Matter? Retrieved from
  27. Solow, R. M. (2001). Applying growth theory across countries. The World Bank Economic Review, 283-288.
  28. Zaher, T. S., & Kabir Hassan, M. (2001). A comparative literature survey of Islamic finance and banking. Financial Markets, Institutions & Instruments, 10(4), 155-199.
No Related Submission Found