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The Impact of Oil Price Volatility, Gross Domestic Product, Foreign Direct Investment on Islamic Banking Investments: An Empirical Evidence of The United Arab Emirates

Author

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  • Mosab I. Tabash

    (College of Business, Al Ain University of Science and Technology, Al Ain, UAE)

  • Samar H. Khan

    (Emirates Canadian University College, Umm Al Quawain, UAE)

Abstract

The current paper examines the impact of Oil Price (OP) fluctuations on Islamic banking investments growth in the UAE. Besides, oil price, the study also uses other variables like Gross Domestic Product (GDP) and Foreign Direct Investment (FDI) to identify the determinants of the Islamic banking investments growth in the emerging economy, UAE. The study is based on econometric analysis with the help of annual time series data from 1990 to 2015 for the study variables. Stationary tests, Cointegration methods, Vector Error Correction Model (VECM), and Granger causality tests are used in the analysis. The major findings of the study revealed that oil prices have long-term and short-term relationships on the Islamic banking investments in the UAE. Our results explore the importance of oil price stabilization in enhancing growth and progress in the UAE economy. The Government of UAE should reform policies and procedures to minimize the effect of such volatility in oil prices which in turn leads to positive impacts on the UAE economy as well.

Suggested Citation

  • Mosab I. Tabash & Samar H. Khan, 2018. "The Impact of Oil Price Volatility, Gross Domestic Product, Foreign Direct Investment on Islamic Banking Investments: An Empirical Evidence of The United Arab Emirates," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 306-312.
    • Handle: RePEc:eco:journ2:2018-05-39
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    References listed on IDEAS

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    Cited by:

    1. YAĞAR EGİLMEZ, Funda, 2020. "The Long-Run Relationship Between Airline Transport, Export Volume And Economic Growth: Evidence From Usa," Academic Review of Humanities and Social Sciences, Bursa Teknik Üniversitesi, vol. 3(2), pages 466-482.
    2. Sugra Humbatova & Afag Huseyn & Natig Gadim-Oglu Hajiyev, 2023. "Impact of Oil Factor on Investment: The Case of Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 129-148, March.
    3. Bartosz Lamasz & Natalia Iwaszczuk, 2020. "Crude Oil Option Market Parameters and Their Impact on the Cost of Hedging by Long Strap Strategy," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 471-480.
    4. Nisful Laila & Aam S. Rusydiana & Muhamad Iqbal Irfany & Imron HR & Popon Srisusilawati & Muhamad Taqi, 2021. "Energy Economics in Islamic Countries: A Bibliometric Review," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 88-95.
    5. Hani El-Chaarani, 2019. "The Impact of oil Prices on the Financial Performance of Banking Sector in Middle East Region," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 148-156.
    6. Ahmad Al Humssi & Maria Petrovskaya & Milana Abueva, 2022. "Modelling the Impact of World Oil Prices and the Mining and Quarrying Sector on the United Arab Emirates’ GDP," Mathematics, MDPI, vol. 11(1), pages 1-22, December.

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    More about this item

    Keywords

    Oil Price; Volatility; FDI; GDP; Islamic investments; Growth; UAE.;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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