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Islamic banking, credit, and economic growth : some empirical evidence.

Caporale, Guglielmo Maria and Helmi, Mohamad Husam (2018) 'Islamic banking, credit, and economic growth : some empirical evidence.', International journal of finance & economics., 23 (4). pp. 456-477.

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.

Item Type:Article
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Full text:(VoR) Version of Record
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Status:Peer-reviewed
Publisher Web site:https://doi.org/10.1002/ijfe.1632
Publisher statement:© 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.
Date accepted:20 June 2018
Date deposited:23 July 2018
Date of first online publication:19 July 2018
Date first made open access:No date available

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