Revisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience

The contribution of Islamic banking towards economic growth remains debatable amongst academicians and practitioners. This study investigates the relationship between Islamic banks’ financing and economic growth in Indonesia which is the largest Muslim population country. This study adopts Autoregre...

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Autores principales:	Indri Supriani, Bayu Arie Fianto, Najim Nur Fauziah, Ryan Rahmah Maulayati
Formato:	article
Lenguaje:	EN
Publicado:	IAIN Surakarta 2021
Materias:	economic growth indonesian economic experience islamic banking profit and loss sharing Business HF5001-6182 Banking HG1501-3550
Acceso en línea:	https://doaj.org/article/15c86cb8bf9e4918adda9740762c18ed
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spelling	oai:doaj.org-article:15c86cb8bf9e4918adda9740762c18ed2021-11-24T01:57:54ZRevisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience2503-42352503-424310.22515/shirkah.v6i1.383https://doaj.org/article/15c86cb8bf9e4918adda9740762c18ed2021-03-01T00:00:00Zhttp://shirkah.or.id/new-ojs/index.php/home/article/view/383https://doaj.org/toc/2503-4235https://doaj.org/toc/2503-4243The contribution of Islamic banking towards economic growth remains debatable amongst academicians and practitioners. This study investigates the relationship between Islamic banks’ financing and economic growth in Indonesia which is the largest Muslim population country. This study adopts Autoregressive-Distributed Lag (ARDL) and utilizes time-series quarterly data from 2011Q1 to 2019Q3. The study uses four predictors: financing to deposit ratio, gross capital fixed formation, inflation, and trade openness. The results from the auto-regressive distributed lag model indicate that, in the long-run, Islamic banks' financing has a significant impact on the Indonesian economy. However, in the short-run, financing does not make a substantial contribution to Indonesian economic growth. The study’s key implication is that financing by Islamic banks still makes a limited contribution to economic growth in Indonesia. This study enhances the literature review, specifically on evaluating the contribution of Islamic banks towards economic growth. Numerous existing studies on this topic covering the crisis period data, which might suffer from data bias. Therefore, this study addresses this topic, excluding the global financial crises period such as 1998, 2008, and 2020, to demonstrate Islamic banks' evident contribution to Indonesian economic growth.Indri SuprianiBayu Arie FiantoNajim Nur FauziahRyan Rahmah MaulayatiIAIN Surakartaarticleeconomic growthindonesian economic experienceislamic bankingprofit and loss sharingBusinessHF5001-6182BankingHG1501-3550ENShirkah Journal of Economics and Business , Vol 6, Iss 1, Pp 18-37 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	economic growth indonesian economic experience islamic banking profit and loss sharing Business HF5001-6182 Banking HG1501-3550
spellingShingle	economic growth indonesian economic experience islamic banking profit and loss sharing Business HF5001-6182 Banking HG1501-3550 Indri Supriani Bayu Arie Fianto Najim Nur Fauziah Ryan Rahmah Maulayati Revisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience
description	The contribution of Islamic banking towards economic growth remains debatable amongst academicians and practitioners. This study investigates the relationship between Islamic banks’ financing and economic growth in Indonesia which is the largest Muslim population country. This study adopts Autoregressive-Distributed Lag (ARDL) and utilizes time-series quarterly data from 2011Q1 to 2019Q3. The study uses four predictors: financing to deposit ratio, gross capital fixed formation, inflation, and trade openness. The results from the auto-regressive distributed lag model indicate that, in the long-run, Islamic banks' financing has a significant impact on the Indonesian economy. However, in the short-run, financing does not make a substantial contribution to Indonesian economic growth. The study’s key implication is that financing by Islamic banks still makes a limited contribution to economic growth in Indonesia. This study enhances the literature review, specifically on evaluating the contribution of Islamic banks towards economic growth. Numerous existing studies on this topic covering the crisis period data, which might suffer from data bias. Therefore, this study addresses this topic, excluding the global financial crises period such as 1998, 2008, and 2020, to demonstrate Islamic banks' evident contribution to Indonesian economic growth.
format	article
author	Indri Supriani Bayu Arie Fianto Najim Nur Fauziah Ryan Rahmah Maulayati
author_facet	Indri Supriani Bayu Arie Fianto Najim Nur Fauziah Ryan Rahmah Maulayati
author_sort	Indri Supriani
title	Revisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience
title_short	Revisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience
title_full	Revisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience
title_fullStr	Revisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience
title_full_unstemmed	Revisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience
title_sort	revisiting the contribution of islamic banks’ financing to economic growth: the indonesian experience
publisher	IAIN Surakarta
publishDate	2021
url	https://doaj.org/article/15c86cb8bf9e4918adda9740762c18ed
work_keys_str_mv	AT indrisupriani revisitingthecontributionofislamicbanksfinancingtoeconomicgrowththeindonesianexperience AT bayuariefianto revisitingthecontributionofislamicbanksfinancingtoeconomicgrowththeindonesianexperience AT najimnurfauziah revisitingthecontributionofislamicbanksfinancingtoeconomicgrowththeindonesianexperience AT ryanrahmahmaulayati revisitingthecontributionofislamicbanksfinancingtoeconomicgrowththeindonesianexperience
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Revisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience

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