| By: |
Ibrahim, Norhaslina;
Masih, Mansur |
| Abstract: |
This paper attempts to investigate the Granger-causality between Islamic banks
and economic growth. Malaysia is taken as a case study. The methodology
adopted is the standard time series techniques. The results tend to suggest
that Islamic bank financing leads growth and other variables, being the most
exogenous compared to others. In other words, the finance is supply-leading
rather than demand-following in the context of Islamic finance in Malaysia.
Thus, this finding has clear policy implications for the government to keep on
enhancing Islamic banks’ development leading to a positive economic growth. |
| Keywords: |
GDP, Islamic Banks, Vector-Error Correction Model, Long Run Structural Modelling, Variance Decompositions |
| JEL: |
C22 C58 E44 |
| Date: |
2018–06–15 |
| URL: |
http://d.repec.org/n?u=RePEc:pra:mprapa:98676&r=all |