Abstract
This study investigates the relationship between the performance of Islamic banks and economic growth in the United Arab Emirates. Return on Assets (ROA), Return on Equity (ROE) and Net Revenue Margin (NRM) are used as proxies for the performance of Islamic banks while Growth Domestic Product (GDP) is used as a proxy of economic growth. The sample consists of all full-fledged Islamic banks working in the UAE. The study period ranges from 2000 to 2014. Pooled Ordinary Least Square (POLS) combined with multicollinearity test are done to test the hypotheses. The results show that there is a positive relationship between the performance of Islamic banks and economic growth in the UAE. The empirical results of the study suggest that the policy makers of UAE should support the Islamic banking sector by setting new measures for its growth and progress.
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