Abstract
The purpose of this paper is twofold. First, it seeks to establish a consistent theoretical framework for the relationship between Islamic finance and economic growth. Second, it attempts to assess empirically the effect that Islamic banking loans had on the economic growth of 13 countries in the MENA region during the 2000–2014 period. We found strong evidence to suggest that financial system development stimulated economic growth in the selected MENA countries over the studied period. Furthermore, we found that while Islamic financial development can boost economic growth, this positive effect is hindered by underdeveloped institutional frameworks. In addition, net-oil-exporting MENA countries do not appear to benefit from large oil-fueled deposits that are likely to increase the scale of loans. The findings suggest that governments should consider implementing proactive and favorable economic and institutional policies that are geared toward Islamic finance.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
