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Beyond Finance: Impact Of Islamic Finance On Economic Growth In Pakistan

Author

Listed:
  • Huma Nawaz
  • Maira Abrar
  • Asma Salman
  • Syed Muhammad Hassan Bukhar

    (Al-Madinah International University MEDIU, Malaysia and Islamia University, Bahawalpur, Pakistan
    Konkuk University, Seoul, South Korea.
    American University in the Emirates, Dubai, United Arab Emirates.
    Virtual University, Pakistan.)

Abstract

Islamic finance, which may have been considered only in the context of a multitude of trading structures among economists, merits a fresh evaluation in how it dovetails with and supports national economic growth. This study examines the dynamic interaction between Islamic financing and economic growth of Pakistan by employing the unit root test, cointegration test and Granger Causality tests to see whether the Islamic financial system influences the economic growth. For the analysis, time series data of total Islamic financing and real GDP per capita, Islamic financial assets, and population to represent real economic sector were considered. Findings/Originality: This paper finds that a well-functioning Islamic financial system promotes economic growth. It also finds an evidence of a bidirectional relationship between Islamic asset financing and population. It implies that population reinforces Islamic finance, and population attracts Islamic financing.

Suggested Citation

  • Huma Nawaz & Maira Abrar & Asma Salman & Syed Muhammad Hassan Bukhar, 2019. "Beyond Finance: Impact Of Islamic Finance On Economic Growth In Pakistan," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 11(1), pages 8-18, April.
    • Handle: RePEc:uii:journl:v:11:y:2019:i:1:p:8-18
    DOI: 10.20885/ejem.vol11.iss1.art2
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    Citations

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    Cited by:

    1. Feng Wang & Wei Chai & Xiaotian Shi & Mingru Dong & Bin Yan, 2021. "Does Regional Financial Resource Contribute to Economic Growth? From the Perspective of Spatial Correlation Network," SAGE Open, , vol. 11(1), pages 21582440219, March.
    2. Laila Refiana Said & Kanwal Bilal & Shahab Aziz & Ambreen Gul & Malik Shahzad Shabbir & Aysha Zamir & Hummera Abro, 2022. "A comparison of conventional versus Islamic banking customers attitudes and judgment," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 27(3), pages 206-220, September.
    3. Kashif Ali & Muhammad Ashfaque & Adil Saleem & Judit Bárczi & Judit Sági, 2022. "Did the Islamic Stock Index Provide Shelter for Investors during the COVID-19 Crisis? Evidence from an Emerging Stock Market," Risks, MDPI, vol. 10(6), pages 1-14, May.
    4. Assad Ullah & Xinshun Zhao & Muhammad Abdul Kamal & Adeel Riaz & Bowen Zheng, 2021. "Exploring asymmetric relationship between Islamic banking development and economic growth in Pakistan: Fresh evidence from a non‐linear ARDL approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 6168-6187, October.
    5. Adil Saleem & Judit Sági & Budi Setiawan, 2021. "Islamic Financial Depth, Financial Intermediation, and Sustainable Economic Growth: ARDL Approach," Economies, MDPI, vol. 9(2), pages 1-22, April.

    More about this item

    Keywords

    Ethical finance; economic growth; Islamic finance; econometric Analysis; Pakistan and Islamic finance;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • P4 - Political Economy and Comparative Economic Systems - - Other Economic Systems
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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