nep-isf New Economics Papers
on Islamic Finance
Issue of 2020‒07‒13
four papers chosen by

  1. The impact of interest rate changes on islamic home financing: Malaysia as a case study By Hashim, Norhaziah; Masih, Mansur
  2. Islamic financial development between polic stability and economic growth in the MENA region: Estimate a model of Simultaneous equations By Abderraouf Mtiraoui; Mongi Lassoued; Amine Mtiraoui
  3. Al Qaeda, fundamentalism and modernity By Tate, John William
  4. Islamic law and investments in children: evidence from the Sharia introduction in Nigeria By Marco Alfano

  1. By: Hashim, Norhaziah; Masih, Mansur
    Abstract: This paper investigated the impact of interest rate changes, specifically the base lending rate (BLR) on the demand for Islamic home financing in a dual banking system. Malaysia is taken as a case study. Theoretically, any increase in the interest rate (base lending rate), would lead customers who are guided by the profit motive to substitute Islamic home financing for conventional bank home loans and vice versa. Using a 109 monthly data series covering ten years, the study found that an increase in the base lending rate would trigger customers to obtain financing from Islamic banks. Conversely, any decrease in the base lending rate would induce customers to shift to the conventional home loans. The paper concludes that because customers are profit motivated, Islamic banks in the dual banking system, such as in Malaysia are exposed to interest rate risks despite operating on an interest free principle.
    Keywords: Islamic financing, Bai-Bithaman Ajil, interest rates, base lending rates, Malaysia
    JEL: C22 C58 E44 G21
    Date: 2018–06–30
  2. By: Abderraouf Mtiraoui (Université de Sousse, Lamided, ISG, Université de Sousse - LAMIDED); Mongi Lassoued (Université de Sousse); Amine Mtiraoui (Institut des Hautes Etudes Commerciales (Université de Sousse))
    Abstract: The purpose of this paper is to study the relationship between the development of Islamic finance and economic growth on the one hand while developing an innovative literature review highlighting the role of the development of Islamic finance and also the the nature of the joint between political stability as an indicator of quality of governance and economic growth. And on the other hand, we empirically try to discover the direct and indirect effects of the development of Islamic finance and political stability on economic growth and hence the relationship between Islamic financial developments measured by private sector bank loans divided by GDP and political stability on economic growth. Our empirical validation is based on an estimation method, namely the model with simultaneous equations in some MENA countries during the period (1990-2018).
    Abstract: Le but de cet article est d'étudier la relation entre le développement de la finance islamique et la croissance économique d'une part tout en développant une revue de littérature innovante mettant en évidence le rôle du développement de la finance islamique ainsi que la nature de l'articulation entre stabilité politique comme un indicateur de la qualité de la gouvernance et de la croissance économique. Et d'autre part, nous essayons empiriquement de découvrir les effets directs et indirects du développement de la finance islamique et de la stabilité politique sur la croissance économique et donc la relation entre les développements financiers islamiques mesurés par les prêts bancaires du secteur privé divisés par le PIB et la stabilité politique sur l'économie croissance. Notre validation empirique est basée sur une méthode d'estimation, à savoir le modèle à équations simultanées dans certains pays MENA au cours de la période (1990-2018).
    Keywords: Islamic financial development,Politic Stability,Models with simultaneous equation,Economic growth,Modèle à équations simultanées,Croissance économique,Stabilité politique,Développement financier islamique
    Date: 2019–10–21
  3. By: Tate, John William (The University of Newcastle, Newcastle Business School)
    Abstract: This paper seeks to challenge two primary views that have been advanced in the wake of September 11 concerning the relationship between Al Qaeda, or militant Islamic fundamentalism more generally, and modernity. These are the views of John Gray and Tariq Ali. John Gray identifies Al Qaeda and Islamic fundamentalism with modernity and even sees Al Qaeda as a product of modernity. Conversely, Tariq Ali, far from identifying Al Qaeda with modernity, identifies the United States' imperial project with fundamentalism and refers to the confrontation between this project and Islamic fundamentalism as a "clash of fundamentalisms". In seeking to challenge these views, the paper distinguishes fundamentalism from modernity in the most foundational terms and argues that the "logic" characteristic of each is intrinsically at odds.
    Keywords: fundamentalism; Al Qaeda; modernity; Islamic fundamentalism
    JEL: D74 F52
    Date: 2019
  4. By: Marco Alfano (Department of Economics, University of Strathclyde)
    Abstract: Islamic law lays down detailed rules regulating children’s upbringing. This study examines the effect of such rules on investments in children by analysing the introduction of Sharia law in northern Nigeria. Difference-in-differences and triple-differences estimates across time, administrative areas and religions show increases in the duration of breastfeeding and child survival. Geospatial discontinuities further show effects for Muslims but not Christians living close to the border. Evidence also shows that these effects concur with a rise in women’s birth rates. Moreover, findings suggest increases in gender gaps; young boys benefit more than girls and adult women’s intra-household bargaining power decreases.
    Keywords: Breastfeeding, Infant Survival, Islam, Nigeria
    JEL: O15 J12 J13
    Date: 2020–03

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