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Islamic banking, credit, and economic growth: Some empirical evidence

Caporale, Guglielmo Maria; Helmi, Mohamad Husam

Islamic banking, credit, and economic growth: Some empirical evidence Thumbnail


Authors

Guglielmo Maria Caporale

Mohamad Husam Helmi



Abstract

This paper examines the effects of Islamic banking on the causal linkages between credit and gross domestic product (GDP) by comparing two sets of seven emerging countries, the first without Islamic banks and the second with a dual banking system including both Islamic and conventional banks. Unlike previous studies, it checks the robustness of the results by applying both time series and panel methods; moreover, it tests for both long‐ and short‐run causality. In brief, the findings highlight significant differences between the two sets of countries reflecting the distinctive features of Islamic banks. Specifically, the time series analysis provides evidence of long‐run causality running from credit to GDP in countries with Islamic banks. This is confirmed by the panel causality tests, although in this case short‐run causality in countries without Islamic banks is also found.

Citation

Caporale, G. M., & Helmi, M. H. (2018). Islamic banking, credit, and economic growth: Some empirical evidence. International Journal of Finance and Economics, 23(4), 456-477. https://doi.org/10.1002/ijfe.1632

Journal Article Type Article
Acceptance Date Jun 20, 2018
Online Publication Date Jul 19, 2018
Publication Date Oct 31, 2018
Deposit Date Jul 23, 2018
Publicly Available Date Mar 28, 2024
Journal International Journal of Finance and Economics
Print ISSN 1076-9307
Electronic ISSN 1099-1158
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 23
Issue 4
Pages 456-477
DOI https://doi.org/10.1002/ijfe.1632
Public URL https://durham-repository.worktribe.com/output/1320379

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Published Journal Article (Advance online version) (2.2 Mb)
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Publisher Licence URL
http://creativecommons.org/licenses/by/4.0/

Copyright Statement
Advance online version © 2018 The Authors International Journal of Finance & Economics Published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.





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