The Relationship Between Murabaha Financing And Key Macroeconomic Indicators

Year 2026, Volume: 13 Issue: 1 , 221 - 235 , 19.02.2026

Raoua Salhi , Mehmet Sabri Topak , Ferda Yerdelen Tatoğlu

https://doi.org/10.26650/ISTJECON2026-1774141

https://izlik.org/JA74XL23ZR

Abstract

This paper aims to evaluate the effectiveness of Murabaha in financing economies and demonstrate its importance along with the extent of its relationship with GDP, Inflation, Interest rate, and Economic openness, in an attempt to understand the broader impact of Islamic banking practices on economic performance. The majority of Islamic banks adopt Murabaha product as the basis for their financing. This is due to its high returns, low risk, ease of implementation, and its pre-determined known profits. The great focus on this financing product prompted us to research its importance within the economy of Saudi Arabia, Malaysia, and Indonesia. For this purpose, quarterly panel data from Q1-2014 to Q4-2021 has been collected. After confirming the stationarity, homogeneity of the coefficients in model, GMM-PVAR model and PVAR Granger Causality test have been applied. The results of which have revealed a presence of a non-causality relationship between Murabaha and both GDP and Economic Openness, and a one-way causal relationship between Murabaha and both Interest rate and inflation. According to these findings, it can be stated that Murabaha financing exerts only a minor effect on Macroeconomic indicators. These empirical findings could have some implications in changing the financing policies of Islamic banks.

Keywords

Murabaha , GDP , Inflation , Interest rate , Economic Openness , Panel Data

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