| By: |
Huseyin Mehmet Bilgin (Faculty of Political Science, Istanbul Medeniyet University, Istanbul, Turkey);
Gamze Danisman (Faculty of Management, Kadir Has University, Istanbul, Turkey);
Ender Demir (Faculty of Tourism, Istanbul Medeniyet University, Istanbul, Turkey);
Amine Tarazi (LAPE - Laboratoire d'Analyse et de Prospective Economique - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société - UNILIM - Université de Limoges) |
| Abstract: |
This paper explores whether the impact of economic uncertainty on credit
growth differs for Islamic vs. conventional banks. Using a sample of 416 banks
(58 Islamic and 358 conventional) in 12 countries, the findings indicate that
an increase in economic uncertainty significantly decreases the credit growth
of conventional banks but does not have any significant impact on Islamic
banks' credit growth. Our results are robust to alternative specifications and
addressing endogeneity concerns using GMM estimators. We further observe that
our findings are stronger for the following countries: (1) countries with
explicit deposit insurance protection system for Islamic banks, (2) lower
foreign dominance, and (3) countries with a higher share of deposits and
assets in Islamic banks. |
| Keywords: |
Conventional Banks,Economic Uncertainty,Islamic Banks,Credit |
| Date: |
2020–02–12 |
| URL: |
http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02475502&r=all |