The effect of Islamic banks on GDP growth: Some evidence from selected MENA countries

By Jamel Boukhatem, F. B. Moussa. Borsa Istanbul Review, 2017

193 citations recorded by the source corpus.

Abstract The purpose of this paper is twofold. First, it seeks to establish a consistent theoretical framework for the relationship between Islamic finance and economic growth. Second, it attempts to assess empirically the effect that Islamic banking loans had on the economic growth of 13 countries in the MENA region during the 2000–2014 period. We found strong evidence to suggest that financial system development stimulated economic growth in the selected MENA countries over the studied period. Furthermore, we found that while Islamic financial development can boost economic growth, this positive effect is hindered by underdeveloped institutional frameworks. In addition, net-oil-exporting MENA countries do not appear to benefit from large oil-fueled deposits that are likely to increase the scale of loans. The findings suggest that governments should consider implementing proactive and favorable economic and institutional policies that are geared toward Islamic finance.

Subfields: Accounting, Economics and Econometrics, Information Systems

View Paper: https://www.semanticscholar.org/paper/66d8cf865f09bd521a3ef803328a2c0f96e863d6

Citations in the corpus

• Economic growth and financial performance of Islamic banks: a CAMELS approach (2020, unknown): “Besides, Boukhatem and Moussa (2018) presented clear empirical evidence that the implementation of the Islamic financial system has stimulated economic growth in the 13 selected MENA region; they applied panel cointegration and FMOLS regression on a sample of Islamic banks in theMENAregion for a…”