Islamic Banking: How Has it Diffused?

By Kangni Kpodar, P. Imam. Social Science Research Network, 2010

150 citations recorded by the source corpus.

This paper investigates the determinants of the pattern of Islamic bank diffusion around the world using country-level data for 1992 - 2006. The analysis illustrates that income per capita, share of Muslims in the population and status as an oil producer are linked to the development of Islamic banking, as are economic integration with Middle Eastern countries and proximity to Islamic financial centers. Interest rates have a negative impact on Islamic banking, reflecting the implicit benchmark for Islamic banks. The quality of institutions does not matter, probably because the often higher hurdle set by Shariah law trumps the quality of local institutions in most countries. The 9/11 attacks were not important to the diffusion of Islamic banking; but they coincided with rising oil prices, which are a significant factor in the diffusion of Islamic banking. Islamic banks also appear to be complements to, rather than substitutes for, conventional banks.

Subfields: Accounting, Economics and Econometrics, Information Systems

View Paper: https://www.semanticscholar.org/paper/1fd762f18e4d8863a3f25a7f075f1d75faf1cfe7

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. A. Prasad

In Economics and Econometrics

1. J. Charap
2. Serhan Cevik
3. A. Prasad

In Information Systems

1. A. Prasad
2. Peterson K. Ozili

Citations in the corpus

• The Effects of the Global Crisis on Islamic and Conventional Banks: A Comparative Study (2010, unknown): “See Imam and Kpodar (2010) for more details on how Islamic banking spread.”
• Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research (2015, unknown): “diffusion of Islamic banking (Imam and Kpodar, 2010) to how Shariá Boards impact”
• The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey (2011, background): “Along with the global expansion of conventional modes of financing, the Islamic banking industry has grown significantly since its inception in the early 1970s and moved beyond the confines of a niche market, largely due to greater financial liberalization and an unprecedented inflow of petrodollars”
• Islamic Finance:Opportunities, Challenges, and Policy Options (2015, background): “Indeed, there is empirical evidence that the oil price is a determinant of IB diffusion (Imam and Kpodar 2010).”