Growth, Islamic Banking and Schumpeterian Vision: An Empırıcal Evidence from the Gulf Arab States

Yıl 2018, Cilt: 4 Sayı: 1, 41 - 56, 31.03.2018

Nalan Işık

https://doi.org/10.25272/j.2149-8407.2018.4.1.03

Öz

The rapid growth of Islamic banking has attracted much
attention lately in the economic literature. The main goal of this paper is to
investigate the relationship between the Islamic banking, economic growth and
innovation using data for the five Gulf Arab States (Bahrain, United Arab
Emirates, Kuwait, Qatar and Saudi Arabia) in the period of 2001–2015. In the
empirical analysis where the panel data method is used, unit root and
co-integration tests were applied to the variables. It is postulated that according
to the test findings, economic growth is co-integrated with Islamic banking and
patent application. Long run co-integration coefficients of the variables were
analysed throughout the panel using the method of Panel Dynamic Ordinary Least
Squares (PDOLS). The conclusion of the empirical study indicates that Islamic
banking funds and innovation in chosen Gulf Arab states have positive and
significant relations with economic growth. 

Anahtar Kelimeler

Islamic banking, economic growth, Schumpeterian perspective, panel data, Gulf Arab States

Kaynakça

• Abduh, M. and Omar, M. A. (2012), Islamic banking and economic growth: the Indonesian experience. International Journal of Islamic and Middle Eastern Finance and Management 5(1): 35-47.
• Abduh, M.; Brahim, S. and Omar, M. (2012), A study on finance-growth nexus in dual financial system countries: Evidence from Bahrain. World Applied Sciences Journal 20(8): 1166-1174.
• Aghion, P. and Howitt, P. (1992), A Model of Growth Through Creative Destruction, Econometrica 60: 323-351.
• Al-Oqool, M. A.; Okab, R. and Bashayreh, M. (2014), Financial Islamic Banking Development and Economic Growth: A Case Study of Jordan. International Journal of Economics and Finance 6(3): 72-79.
• Askari, H. (2012), Islamic finance, risk-sharing, and international financial stability, Yale Journal of International Affair 7(1): 1–8.
• Bagehot, W. (1999), Lombard Street: a description of the money market. 5th ed. New York: John Wiley & Son İnc.
• Baltagi, B. (2008), Econometric analysis of panel data. John Wiley & Sons.
• Beck, T.; Levine, R.and Loayza, N. (2000), Finance and the sources of growth. Journal of Financial Economics 58: 261- 300.
• Beck, T. and Levine, R. (2004), Stock markets, banks, and growth: Panel evidence. Journal of Banking & Finance 28(3): 423-442.
• Beck, T,; Demirgüç-Kunt, A.and Merrouche, Q. (2013), Islamic vs. Conventional Banking: Business model, efficiency and stability. Journal of Banking & Finance 37(2): 433-447.
• Bittencourt, M. (2012), Financial development and economic growth in Latin America: Is Schumpeter right?. Journal of Policy Modeling 34(3): 341-355.
• Bönte, W.and Nielen, S. (2010), Innovation, credit constraints, and trade credit: Evidence from a cross-country study. (No. sdp10005). Universitätsbibliothek Wuppertal, University Library.
• Breitung, J. (1999), The local power of some unit root tests for panel data. Discussion Paper. Berlin: Humboldt University.
• Breitung, J. and Pesaran, M.H. (2008), Unit Roots and Cointegration in Panels. Berlin Heidelberg: Springer.
• Cattelan, V. (2009), From the concept of haqq to the prohibitions of riba, gharar and maysir in Islamic finance. International Journal of Monetary Economics and Finance 2(3-4): 384-397.
• Ceylan, S.and Durkaya, M. (2010), Türkiye’de Kredi Kullanimi-Ekonomik Büyüme İlişkisi. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi 24(2): 21-35.
• Chapra, M. U. (2009), The Global Financial Crisis Can Islamic Finance Help?. Insights 1(4): 27.
• Choi, I. (2001), Unit root tests for panel data. Journal of international money and Finance 20(2): 249-272.
• Choudhury, M. (1999), Resource mobilization and development goals for Islamic banks. Proceedings of the Second Harvard University Forum on Islamic Finance: Islamic Finance into the 21st Century, 31-50.
• Dar, H. A. and Presley, J. R. (2000 ), Lack of profit loss sharing in Islamic banking: management and control imbalances. International Journal of Islamic Financial Services 2(2): 3-18.
• Ernst & Young. (2016), World İslamic Banking Competitiveness Report 2016, 68p. Available from Internet: http://www.ey.com/Publication/vwLUAssets/ey-world-islamic-banking-competitiveness-report-2016/$FILE/ey-world-islamic-banking-competitiveness-report-2016.pdf.
• Farahani, Y. G. and Sadr, S. M. H. (2012), Analysis of Islamic bank's financing and economic growth: Case study Iran and Indonesia. Journal of Economic Cooperation & Development 33(4): 1-23.
• Fagerberg, J. and Srholec, M. (2008), National innovation systems, capabilities and economic development. Research Policy 37(9): 1417-1435.
• Goaied, M. and Sassi, S. (2011), Financial development, Islamic banking and economic growth evidence from MENA region. International Journal of Business and Management Science 4(2): 105-128.
• Gürkan, C. (2007), Veblen, Schumpeter ve Teknoloji, in. E. Özveren (Eds.). Kurumsal İktisat. Ankara: İmge Kitabevi. 237-282.
• Güven, S. (2002), Türkiye’de Banka Kredileri ve Büyüme. İktisat, İşletme ve Finans Dergisi 197: 88-100.
• Hadri, K. (2000), Testing for stationarity in heterogeneous panel data. The Econometrics Journal 3(2): 148-161.
• Howitt, P. and Aghion, P. (1998), Capital accumulation and innovation as complementary factors in long-run growth. Journal of Economic Growth 3(2): 111-130.
• Iqbal, M. and Molyneux, P. (2004), Thirty years of Islamic banking: History, performance and prospects. Berlin Heidelberg: Springer.
• Im, K. S;, Pesaran, M. H. and Shin, Y. (2003), Testing for unit roots in heterogeneous panels. Journal of Econometrics 115(1): 53-74.
• İçke, M. A. (2014), Schumpeter Ve Yeniliklerin Finansmanı. Kahramanmaraş Sütçü İmam Üniversitesi Sosyal Bilimler Dergisi 11(1): 17-38.
• Levine, R. and Zervos, S. (1998), Stock markets, banks, and economic growth. American Economic Review 88: 537-558.
• Kao, C. (1999), Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics 90(1): 1-44.
• Kao, C.and Chiang, M. H. (2000), Testing for structural change of a cointegrated regression in panel data. Syracuse University. Manuscript. 24p. Available from Internet: http://faculty.maxwell.syr.edu/cdkao/working/change.pdf.
• Khan, M. S. (1986), Islamic interest-free banking: A theoretical analysis. Staff Papers-International Monetary Fund 33(1): 1-27.
• King, R. G. and Levine, R. (1993), Finance and growth: Schumpeter might be right. The Quarterly Journal of Economics 108(3): 717-737.
• Kettell, B.(2011), Introduction to Islamic banking and finance. United Kingdom: John Wiley & Sons Ltd.
• Maddala, G. S. and Wu, S. (1999), A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and statistics 61(S1): 631-652.
• Levin, A.; Lin, C. F. and Chu, C. S. J. (2002), Unit root tests in panel data: asymptotic and finite-sample properties. Journal of econometrics 108(1): 1-24.
• Manap, T. A. A;, Abduh, M. and Omar, M. A. (2012), Islamic banking-growth nexus: evidence from Toda-Yamamoto and bootstrap Granger causality test. Journal of Islamic Finance 1(1): 59-66. Mankiw, N.G. (2014), Principles of Macroeconomics.7th.Ed. Standford: Cangage Learning.
• Mashal, A. M. (2012), Islamic financial in the global financial system. Asian Economic and Financial Review 2(1): 207.
• Meierrieks, D.(2014), Financial Development and Innovation: Is There Evidence of a Schumpeterian Finance-Innovation Nexus?. Annals Of Economics And Finance 15(2): 343-363.
• Qorchi, M.E. (2005), La finance Islamique est en marche. Finances et Development 42(4): 46-49. Ozcan, B. and Ari, A. (2011), An Empirical Analysis of Relationship between Financial Development and Economic Growth: The Turkish Case. Business and Economics Research Journal: 2(1): 121-142.
• Pedroni, P. (1999), Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics 61(s1): 653-670.
• Pedroni, P. (2004), Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric theory 20(03): 597-625.
• Schumpeter, J. A. [1911] 1934, The Theory of Economic Development. Cambridge: Harvard University Press.
• Schumpeter, J. A. (2008), Konjunkturzyklen. Göttingen: Vandenhoeck & Ruprech.
• Shane, S.and Venkataraman, S. (2000), The promise of entrepreneurship as a field of research. Academy of Management Review 25(1): 217-226.
• Sinha, T. (2001), The role of financial intermediation in economic growth: Schumpeter revisited. Economic theory in the light of Schumpeter's scientific heritage, 63-70.
• Siddiqi, M.N. (2006), Islamic banking and finance in theory and practice: A Survey of state of the Art. Islamic Economic Studies 13(2): 1- 48.
• Stock, J. H. and Watson, M. W. (1993), A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica: Journal of the Econometric Society 61(4): 783-820.
• Tajgardoon, G.; Behname, M. and Noormohamadi, K. (2013), Islamic Banking and Economic Growth: Evidence From Asia. Journal of Modern Accounting and Auditing 9(4): 542-546.
• Tabash, M. I.and Dhankar, R. S. (2013), An empirical analysis of the flow of Islamic banking and economic growth in Bahrain. International Journal of Management Sciences and Business Research. 3(1): 96-103.
• Tabash, M. and Dhankar, R. (2014), Islamic Banking and Economic Growth: An Empirical Evidence from Qatar. Journal Of Applied Economics And Business 2(1): 51-67.
• Tatoğlu, F.Y. (2013), Panel Veri Ekonometrisi Stata Uygulamalı 2. Ed. İstanbul: Beta Basım A.Ş. The Global Religious Landscape A Report on the Size and Distribution of the World’s Major Religious Groups as of 2010. (2012), Pew Research Center, Washington, D.C Available from Internet: http://www.pewforum.org/global-religious-landscape.aspx .
• Ustaoglu, M.; İncekara, A.and Yıldız, B. (2013), Analysis Of Economic Growth And Financial Structure Of Participation Banks, Islamic Views And Agenda: Case Of Turkey. Journal of Islamic Banking and Finance 1(1): 1-10.
• Ünal, O. and Yücedağ, N. (2013), Kredi Talebinin Değerlendirilmesi ve Kredi Talebinin Değerlendirilmesinde Finansal Bilginin Önemi. İktisadi ve İdari Bilimler Fakültesi Dergisi 15(1): 98-122.
• Visser, H. (2013), Islamic finance: Principles and practice. Second edition. UK: Edward Elgar Publishing.
• Yusof, M.R. and Bahlous, M. (2013), Islamic banking and economic growth in GCC & East Asia countries: A panel cointegration analysis. Journal of Islamic Accounting and Business Research 4(2): 151-172.
• Webb, I. P.; Grace, M. F. and Skipper, H. D. (2002), The effect of banking and insurance on the growth of capital and output. Centre For Risk Management And Insurance Working Paper 02-1. 38p. Available from Internet: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.535.3081&rep=rep1&type=pdf
• BP, Statistical Review of World Energy, June (2016), Available from Internet: http://www.bp.com/content/dam/bp/pdf/energy-economics/statistical-review-2016/bp-statistical-review-of-world-energy-2016-oil.pdf