TY  - JOUR
AB  - Purpose– The purpose of this paper is to examine the short‐run and the long‐run relationships between Islamic banking development and economic growth in the case of Indonesia.Design/methodology/approach– Using quarterly data (2003:1‐2010:2), this paper utilizes the bound testing approach of cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework.Findings– The results demonstrate a significant relationship in short‐run and long‐run periods between Islamic financial development and economic growth. The relationship, however, is neither Schumpeter's supply‐leading nor Robinson's demand‐following. It appears to be bi‐directional relationship.Originality/value– This paper uses empirical evidence to show the role of Islamic banks' financing towards economic performance of a country. To the best of the authors' knowledge, the study on the role of Islamic banking development towards economic growth is limited, particularly in the context of Indonesia.
VL  - 5
IS  - 1
SN  - 1753-8394
DO  - 10.1108/17538391211216811
UR  - https://doi.org/10.1108/17538391211216811
AU  - Abduh Muhamad
AU  - Azmi Omar Mohd
PY  - 2012
Y1  - 2012/01/01
TI  - Islamic banking and economic growth: the Indonesian experience
T2  - International Journal of Islamic and Middle Eastern Finance and Management
PB  - Emerald Group Publishing Limited
SP  - 35
EP  - 47
Y2  - 2024/04/25
ER  -