Institute of Islamic Banking (IIB)

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Browsing Institute of Islamic Banking (IIB) by Subject "Economic Growth"

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    Islamic banking and economic Growth: Case of Pakistan
    (UNIVERSITY OF MANAGEMENT AND TECHNOLOGY, 2015) Mushtaq, Afia
    Islamic banking in Pakistan has gained recognition, in last ten to eleven years. There are many products which are different from conventional banking and the most significant element is zero interest. Currently, a large no of people have motivation towards Islamic banking compared to conventional banking especially in the view of growth in its assets,investment and deposit. The increasing number of Islamic banking institutes indicates an increasing trend of Islamic banking in Pakistan. People are trusting on this mode of banking due to which the number of Islamic banking institutes is increasing and different conventional banks are opening Islamic banking branches to cater the increasing demands of people of Pakistan. Extensive work has been done in evaluating the connection between the financial sector and development, however research work regarding the Islamic banking framework is still insufficient .The present study is unique as it investigates the short run and the long run relationship between Islamic financial investment, its diverse items and financial development, especially in Pakistan .For the analysis we have utilized the bound testing methodology of integration and error correction models (ECMs), developed within an autoregressive distributed lag (ARDL) structure by Pesaran and Shin (1995), Pesaranet al. (1996) and Narayan (2004). Using quarterly data for the period of 2006-2013 it is found that there is a supply side relation between economic growth and Islamic banking in Pakistan and Islamic banking industry exerts significant impact on economic growth.