作者
Mohammed Ayoub Ledhem, Mohammed Mekidiche
简介
This study aims to investigate empirically the link between Islamic finance performance and economic growth from a robust sample which is the top pioneer countries of the Islamic finance industry in the Southeast of Asia (Malaysia, Indonesia, Brunei Darussalam). This study's sample consisted of all full-fledged Islamic banks working in all of Malaysia, Indonesia, and Brunei Darussalam covering a period range from the last quarter of 2013 (2013Q4) until the last quarter of 2019 (2019Q4). This study employed the profitability ratios of the return on assets (ROA), return on equity (ROE), and net profit margin (NPM) as the main factors of Islamic finance performance, while the gross domestic product (GDP) was used as a measurement of economic growth. For robust empirical results without bias, this study controlled the empirical modeling with various macro-economic factors like the gross fixed capital formation (GFCF), trade openness, and consumer price index (CPI). This study applied Dynamic Panel One-Step System GMM as the most suitable econometric model to explore the effect of Islamic finance performance on economic growth. The results showed that Islamic finance performance has a positive effect on economic growth through the return on equity (ROE) and the net profit margin (NPM) which leads to conclude that Islamic finance performance is contributing to economic growth which validates the'Supply-leading hypothesis' that Islamic finance is leading to economic growth through the contribution of the highly lucrative investment opportunities in economic growth that are produced from the Islamic banks’ profits in Southeast Asia.