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...

وصف كامل

محفوظ في:
التفاصيل البيبلوغرافية
المؤلفون الرئيسيون: Abduh, Muhamad, Omar, Mohd. Azmi
التنسيق: مقال
اللغة:English
منشور في: Emerald Group Publishing 2012
الموضوعات:
الوصول للمادة أونلاين: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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الوصف
الملخص: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