INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS

Transcription

1 The Impact of Islamic Finance on Some Macro Economic Variables. (A case study of Jordan Islamic Bank) *Torki M. Al-Fawwaz Finance and Economic Department, Faculty of Finance and Business Administration, AL Al-bayt University,Mafraq, Jordan. **Ateyah M. Alawneh Department of Finance and Banking Sciences, Faculty of Business Administration, Ajloun National University, Jordan. *** George N. Shawaqfeh Department of Finance and Banking Sciences, Faculty of Business Administration, Ajloun National University, Jordan. Corresponding author Correspondence: Torki M. Al-Fawwaz. Finance and Economic Department, Faculty of Finance and Business Administration, AL Al-bayt University, Mafraq, Jordan Abstract The study aims to clarify the impact of Islamic finance on some macroeconomic variables during the period ( ).The study used four regression models to test the hypotheses of the research. The analysis shows a statistically significant positive relationship between Islamic finance and GDP. There is a statistically significant positive relationship between Islamic finance and domestic investment, and also a statistically significant positive relationship between Islamic finance and economic growth. This means that the Islamic finance contributes significantly to the promotion of the economic activity and it supports the process of economic development. The study also found that there is a statistically significant negative correlation between Islamic finance and the rate of inflation. This means that the Islamic finance enhances the production of goods and services in the economy field leading to a decline in the general price level. Finally, the study recommends the need to take care of the role of Islamic finance, the derivation of new COPY RIGHT 2015 Institute of Interdisciplinary Business Research 10

2 Islamic financial instruments, and enhancing the study of Islamic financial engineering in institutes and colleges at universities. Keywords: macroeconomic variables (Gross Domestic product, Economic Growth, Domestic investment, Inflation, Economic Growth,Islamic finance). 1. Introduction The concept of the Islamic Banking emerged in the early sixties of the twentieth century to help absorbing the money surplus in the Islamic countries and since then it has remarkably grown especially as it has been accompanied by the development of the Islamic economic thought which is based on the Islamic prohibition of usury. This development entailed revision of the Islamic fiscal structures and this led to the of abandonment of interest system, and taking up the adoption of the principle of the participation in profit and loss, a principle which has been firmly adhered to by the Islamic banks and applied to various operations and bank services. Being more than fifty years old, the Islamic banking system has become a part of the world banking system. Since the establishment of the first Islamic bank in the early1960s in Egypt the activity of Islamic banking has been growing steadily throughout the world especially in the 1970s and the 1980s. The Islamic banking system also witnessed great developments. A major progress was the foundation of The Islamic and Training Institute by The Islamic Development Bank in Jeddah to conduct empirical and theoretical research. The non-interest banking activity has widely spread in many Islamic countries and some European countries. Moreover, some traditional banks started to open branches for Islamic transactions (Traad, 2003). Bahrain and Malaysia are examples of the countries which encourage Islamic banking. The banking systems were converted to noninterest banks in Iran, Pakistan, and Sudan. In COPY RIGHT 2015 Institute of Interdisciplinary Business Research 11

3 addition, western commercial banks began to provide Islamic services through what is known as Islamic windows. (Al-Qudah and Jaradat, 2013) The Islamic Financial tools are among the modern tools that came as substitutes for the traditional financial ones. In Jordan, the place of the study, most of the population are Muslims; they prefer the Islamic tools to carry out their transactions and dealings. In addition, these tools are appropriate for the financial needs of the investors who want to finance their investment projects especially building up a fixed capital. Though the traditional funding tools have gained a substantial significance in recent decades, the Islamic tools are in the stage of growth, development and expansion and they are being exercised in the daily transactions. As the theoretical aspect of the Islamic financial system is still in the early stages, there are continuous efforts to develop Islamic tools compliant with the Islamic Law( Sharia h). For this reason, the effect of the Islamic financial tools on some economic variable have not been received due attention by other researchers. Therefore, this study is conducted to highlight the effect of the Islamic financial tools on the domestic investment, the economic growth, the Gross Domestic Product and inflation. The research is a case study of Jordan Islamic Bank which was founded in As it is the oldest Islamic bank in the country. Therefore,it is chosen for this case study to find out the extent of the effect of Islamic banking on some economic variables in Jordan through the various processes of Islamic financing such as musharakah (partnership Financing ),Murabaha(mark up or cost plus financing ) and Ijara (Lit: letting on lease ). The Islamic banks are distinct from other banks by the fact that they are based on the application of the Islamic banking system which does not adopt the usury system in its operations. In Islamic banking COPY RIGHT 2015 Institute of Interdisciplinary Business Research 12

4 terms, money cannot be sold but it can be used for funding through using the modern Islamic financial tools or selling goods through Murabaha (Mark up or Cost plus financing ), which is a particular kind of sale, compliant with Shari ah, where the seller expressly mentions the cost he has incurred on the commodities for sale and sells it to another person by adding some profit or mark-up thereon which is known to the buyer. On the contrary, the usury or interest banking system considers money as a commodity that can be sold for interest. Therefore, this study emanates not only from the inability of the traditional financial tools to meet the needs and requirements of investment in various sectors, but also because the majority of the Jordanian populations are Muslims. Therefore, the study seeks to evaluate the effect of the Islamic financing system on the Gross Domestic Product, the domestic investment, inflation and economic growth. This study investigates the impact of Islamic financing system on some macroeconomic variables in Jordan. The paper is divided into five sections.section 1 is the introduction; section 2 is the literature review. Section 3 includes the methodology used in analyzing the relationship between Islamic finance system and some macroeconomic variables used in this study. Section 4 is dedicated to the discussion of the results and Section 5 is dedicated to the conclusion. COPY RIGHT 2015 Institute of Interdisciplinary Business Research 13

5 2. Literature Review: 2.1 Empirical Evidence This section is a review of the related studies addressing the determinants (factors) of the characteristics of Islamic banks, the financial operations, the impact of macroeconomic variables (external variables), bank characteristics (internal variables), profitability and the relationships between Islamic banking development and economic growth. Among the studies reviewed are: Bahar,(1999). states that Islamic banking is significant because it presents a financial intermediation system that lets the world population benefit from the savings of Muslims worldwide and vice versa. Islamic finance is important to the world economy because it goes together with the traditional system and tackles the conventional system s incapability of assimilating the Islamic markets and into the global economy. Bashir and Hassan (2000). studied the effect of bank characteristics on Islamic banks financial performance. They found that profitability is positively correlated to equity to total assets, but related to loans ratios inversely. Also, they found out that expansion has a positive and significant effect on the Islamic banks financial performance. Al-Qudah & Jaradat,(2013) examined the effect of external variables and internal variables of the bank on the effectiveness of Jordanian Islamic banks for the period ( ). They concluded that the bank size had a positive and significant effect on returns on assets (ROA) and returns on equity (ROE). Whereas the leverage measured by total deposit to total assets had a negative but significant effect on COPY RIGHT 2015 Institute of Interdisciplinary Business Research 14

6 (ROA) and (ROE). Also they found that macroeconomic factors ( external variables) of Amman Stock Exchange Index, construction licensed square meters and money supply growth were good. Yusoff, Adebola and Dahalan (2011) examined the effect of conventional bank interest rate on the volume of financing of Islamic banks in Malaysia for the period 2006:12 to 2011:3, The omitted variable bias was provided for by including several additional explanatory control variables such as production index, real effective exchange rate, price index and stock market index. The relationship among the variables was examined with the ARDL approach to co-integration. Using empirical evidence to show the role of Islamic banks financing on economic performance,yazdan and Sadr (2012) studied the short-run and the long-run relationships between Islamic banking development and economic growth in a study that involved Iran and Indonesia. They utilized the quarterly data (2000:1-2010:4). They also examined modes of Islamic financing and the extent of commercial banks application of the Islamic banking law. They found significant bi-directional correlation between the short-run and the long-run relationships between Islamic banking development and economic growth. Tabash and Dhankar(2014) carried out a study that examined the correlation between the development of Islamic financing system and the economy growth in the United Arab Emirates (UAE). Time series data from 1990 to 2010 were used to document the relationship between the development of Islamic finance and economic growth, They found that the Islamic Banks financing has positively contributed to the increase of investment in UAE on the long run. Another study bytabash and Dhankar(2014) also examined the relationship between the development of Islamic finance system and economic growth in Qatar. They found that in the long run, Islamic banks financing is positive and significantly correlated with economic growth in Qatar. COPY RIGHT 2015 Institute of Interdisciplinary Business Research 15

7 Mohagheghniya, Khalighi and Bakhtiyari (2013) studied the impact of Islamic banking loans to various contracts compliant with Islamic Law (Shari ah) on the GDP of Iran during (2000 to 2010). In this research the ARDL and VAR approach was adopted to estimate the function of long run relation. They found out that the former case showed that contracts have a significant and positive effect on GDP. Thus, the literature reveals considerable gaps in research pertaining to Islamic Financing system. Few studies have been conducted to examine the impact of Islamic finance on domestic investment and inflation, In light of this knowledge shortage, the present paper is a case study of Jordan Islamic Bank ; it presents new empirical evidence pertaining to the impact of the Islamic financing system on the microeconomic variables in Jordan. 3.The Sample and Methodology 3.1 The Sample The study used Jordan Islamic Bank as a sample while the other banks (Dubai Islamic Bank, the Al Rajhi Bank) are not involved by the study because they did not qualify for the sample of the study they were opened in Jordan in 2010 and 2011 respectively. So, they lack enough relevant data. The study covered the period The present study chose the Jordan Islamic bank as a case study to examine the factors that affect microeconomic variables in Jordan. The data used in the present study is obtained from the database of Jordan Islamic bank, central bank of Jordan and Department of Statistics of Jordan. 3.2 Methodology This study adopts the panel data for the empirical analysis of Islamic finance effect on certain macroeconomic variables in Jordan. The data is obtained from the database of Jordan Islamic bank, central bank of Jordan and Department of Statistics of Jordan. In other words, macroeconomic variables are employed to test the study hypotheses. COPY RIGHT 2015 Institute of Interdisciplinary Business Research 16

8 3.2.1 Independent Variables Islamic Financing: The Islamic financing system provides in kind or incorporeal financing services to the various establishments compliant with the rules and principles of the Islamic Law( Shari ah),according to technical legal criteria and controls to enable them play effective roles in achieving economic and social development( Baltaji, 2005). The types of services provided by Jordan Islamic bank include the following (Islamic Bank yearly report, 2008): 1-Murabaḥah: It entails that the seller expressly mentions the cost he has incurred on the commodities for sale and sells it to another person by adding some profit or mark-up thereon which is known to the buyer. As the requirement includes an "honest declaration of cost", Murabaḥah is one of three types of bayu-alamanah (fiduciary sale). The other two types of bayu-al-amanah are tawliyah (sale at cost) and wadiah (sale at specified loss). Murabaha for the customers which allows the bank to sell its customer who demands to buy a commodity at cost price plus fixed profit and the last type is Murabaha bi Waad or Banking profit. 2- Musharakah - Partnership Financing :it is sometimes referred to as Islamic joint- venture financing. It is an arrangement between the bank and the customer (borrower) where both parties agree to make a capital contribution towards financing a commercial operation, share profits from the arrangement at a pre-agreed ratio and the losses from the arrangement need to be shared pro-rata to the capital contributions of each of the parties. This partnership is of three kinds: permanent, diminishing and partnership ending with ownership. 3- Ijara: Lease : It is the ownership with benefit or compensation and it has two types: a- Operation lease: It refers to the lease contracts that end without transferring the ownership of leased assets to the lessee. COPY RIGHT 2015 Institute of Interdisciplinary Business Research 17

9 B: Lease to Purchase: It refers to the lease contracts that end with transferring the ownership of leased assets to the lessee. 4- Financial assets held for trading: Financial investments are acquired and created in order to obtain profits through short-term changes in prices or profit margin. 5-Assets available for deferred sale: They are the assets owned by the bank to be sold through deferred sale by installments. This kind of sale is known as bargain sale with installments. This makes it different from mark up sale demanded by the buyer. 6- Investments in Associates: Allied Companies are those companies that are not controlled by the bank,but it exercises significant influence on their decisions regarding the financial and operating policies. The bank has the ratio ranging from 20% to 50% of the voting rights. 7-Real Investments in real estate: They are the acquisition of real estate or land or part of it in order to obtain regular income or they are retained for potential increase in their value in the future or for both. 8- Financial assets held to maturity: They are the investments that the bank has a positive orientation and the ability to keep them until maturity Dependent Variables: The dependent variables are the significant macroeconomic variables affected either positively or negatively by of Islamic finance. They are: A - Economic Growth : It is an increase in income or gross domestic product at current prices, and it is expressed as the rate of growth of GDP at current market prices, and is calculated by the following equation ( The present year COPY RIGHT 2015 Institute of Interdisciplinary Business Research 18

10 GDP at the current prices minus the GDP of the previous year current prices / GDP previous year current prices) ( Alawneh, 2012) B- Inflation: It is a sustained rise of the general level of prices, leading to a decline in purchasing power of cash, or currency devaluation. And it is termed as the rate of inflation. (Central Bank of Jordan, various issues) C- Domestic Investment: It is the capital spending of the government, individuals,private institutions and projects in order to add new productive capacities to the existing productive assets of the community. In other words, it is the public investment plus the private investment. (Alawneh, 2012). D-Gross Domestic Product: GDP represents the total values of all goods and services intended for final use and produced in the economy during the year at current prices (Central Bank of Jordan, various issues) Regression Models: Four regression models will be used, two simple regression models and two multiple regression models, to study the impact of Islamic finance of some economic variables as follows: The first model: The simple linear regression method will be adopted using the program (E-views) to study the effect of the independent variable on the GDP according to the following regression equation: GDP= a + B1FS (-3) +E Whereas: FS lagged (-3): Islamic finance (financial instruments used in the Jordan Islamic Bank a: hard in the regression equation COPY RIGHT 2015 Institute of Interdisciplinary Business Research 19

11 GDP lagged (-3): GDP at current prices. B1: Regression parameter to be estimated. E: random error. The second model: the simple linear regression method will be adopted using the program (E-views) to study the effect of the independent variable on the domestic investment according to the following regression equation: I(-3) = a0 + B1FS(-3) +E Whereas I lagged (-3): domestic investment. The third model: The multiple linear regression method and the program (E-views) will be used to study the effect of the independent variable on economic growth according to the following regression equation: IN(1)= a0 + B1FS(2) + B2GDP(2) + E Whereas: IN lagged (1): the rate of inflation. The fourth model: The multiple linear regression method and the program (E-views) are used to study the effect of the independent variable of the rate of the economic growth according to this equation: GDPG(-3)= a0 + B1FS+ B2GDP + E Whereas: GDPG lagged (-3): economic growth rate COPY RIGHT 2015 Institute of Interdisciplinary Business Research 20

12 3.2.4 The Study Hypotheses: In light of the literature review and economic theory the present study examines the following hypotheses: H1: There is a positive relationship between Islamic finance and Gross Domestic Product H2: There is a positive relationship between Islamic finance and domestic investment. H3: There is a negative relationship between Islamic finance and inflation rate. H4: There is a positive relationship between Islamic finance and Economic Growth 4. Regression Analysis 4.1- Effect of Islamic finance on GDP. Using (E-views) the model was estimated and the results were GDP = E-05FS(-3) T : ( )*** ( )*** Table -1 Regression Model Results Dependent Variable: GDP Variable Coefficient t- Statistic Prob. FS(-3) 1.30E C COPY RIGHT 2015 Institute of Interdisciplinary Business Research 21

13 R- Squared: 87% Adjusted R- Squared: 85% F-Statistic : 49 Prob(F-statistic ) : 0.00 Durbin-Watson stat : 2.33 The model clearly shows that the Adjusted R- Squared is about( % 85 ).This shows that the change in the independent variable explains about (%85) of the changes in the dependent variable while the value of the F-statistic was (49) with zero Probability F-statistic. This means that the model is statistically significant. The value of Durbin-Watson stat is (2.33), which means that the model is appropriate and statistically significant as there is no autocorrelation problem or (Systematic Error) difference between the expected and the real the dependent variable. The analog estimation of the model shows that the relationship between the change in Islamic finance and the change in the overall gross domestic is positive as the estimated impact of Islamic finance is (8.17E- 06), that is, there is a positive relationship between the effect of a change in Islamic finance and the change in GDP. This result is consistent with the literature or the financial and economic theories which found a positive relationship between Islamic finance and GDP. According to the test T-Test, this result is statistically significant at the level (1%) i.e. the confidence level for this variable is equal to (99%) which indicates the acceptance of the hypothesis, and this stipulates the presence of the impact of Islamic finance on GDP. COPY RIGHT 2015 Institute of Interdisciplinary Business Research 22

14 4.2 The impact of Islamic Finance (Islamic financial instruments)on the Domestic Investment: The (E-views) program the model was used to estimate the model and the results were as follows: I(-3) = FS(-3) T: ( ) ( )*** Table-2 Results of regression model Dependent Variable: I (-3) Variable Coefficient t- Statistic Prob. FS(-3) C R- Squared: 85% Adjusted R- Squared: 83% F-Statistic : 83 Prob(F-statistic ) : 0.00 Durbin-Watson stat : 2.41 It is clear that the Adjusted R- Squared is (% 83).This shows that the change in the independent variable explains about (%83) of the changes in the dependent the variable while the value of the F-statistic was COPY RIGHT 2015 Institute of Interdisciplinary Business Research 23

15 (63) with zero Probability F-statistic. This means that the model is statistically significant. The value of Durbin-Watson stat is (2.41), which means that the model is appropriate and statistically significant as there is no autocorrelation problem or (Systematic Error) difference between the expected and the real the dependent variable. The analog estimation of the model shows that the relationship between the change in Islamic finance and the change in domestic investment is positive as the estimated impact of Islamic finance is ( ), that is, there is a positive relationship between the effect of a change in Islamic finance and the change in the domestic investment. This result is consistent with the literature or the financial and economic theories which found a positive relationship between Islamic finance and the domestic investment. According to the test T-test, this result has a statistical significance at the level (1%) i.e. the confidence level for this variable is equal to (99%) indicating the acceptance of the hypothesis, which stipulates the presence of the relationship between the Islamic finance and the domestic investment. 4.3 The impact of Islamic Finance (Islamic financial instruments) on the Inflation Rate: The (E-views) program the model was used to estimate the model and the results were as follows: IN(1)= E-10 FS(2) GDP(2) T: ( )*** ( )*** ( )*** COPY RIGHT 2015 Institute of Interdisciplinary Business Research 24

16 Table -3: Results of the regression model Dependent Variable: IN(1) Variable Coefficient t- Statistic Prob. FS(3) -5.35E GDP(1) C R- Squared: 88% Adjusted R- Squared: 84% F-Statistic : 23 Prob(F-statistic ) : 0.01 Durbin-Watson stat 2.80 It is clear that the Adjusted R- Squared is( % 84).This shows that the change in the independent variable explains about (%84) of the changes in dependent the variable while the value of the F-statistic was (22) with %1 Probability F-statistic. This means that the model is statistically significant. The value of Durbin-Watson stat is (2.47), which means that the model is appropriate and statistically significant as there is no autocorrelation problem or (Systematic Error) difference between the expected and the real the dependent variable. COPY RIGHT 2015 Institute of Interdisciplinary Business Research 25

17 The analog estimation of the model shows that the relationship between the change in Islamic finance and the change in the inflation rate is negative as the estimated impact of Islamic finance is (-5.35E-10), that is, there is a negative relationship between the effect of a change in Islamic finance and the change in inflation rate. This result is consistent with the literature or the financial and economic theories which found a negative relationship between Islamic finance and inflation rate. According to the test T-Test, this result has a statistical significance at the level (1%) i.e. the confidence level for this variable is equal to (99%) indicating the acceptance of the hypothesis, which stipulates the presence of a negative relationship between the Islamic finance and the inflation rate. 4.4 The Effect of Islamic Finance (Islamic financial instruments) on the Economic Growth Rate: The (E-views) program the model was used to estimate the model and the results were as follows: GDP(-3) = E-10 FS GDP T: ( ) ( )*** ( )*** Table-4: The regression Model Results Dependent Variable: GDPG(-3) Variable Coefficient t- Statistic Prob. GDP FS 4.15E C R- Squared: 92% COPY RIGHT 2015 Institute of Interdisciplinary Business Research 26

18 Adjusted R- Squared: 90% F-Statistic : 37.8 Prob(F-statistic ) : 0.00 Durbin-Watson stat 3.25 It is clear that the Adjusted R- Squared is (% 92).This shows that the change in the independent variable explains about (%90) of the changes in dependent the variable while the value of the F-statistic was (37) with zero Probability F-statistic. This means that the model is statistically significant. The value of Durbin-Watson stat is (3.25), which means that the model is appropriate and statistically significant as there is no autocorrelation problem or (Systematic Error) difference between the expected and the real the dependent variable. The analog estimation of the model shows that there is a positive relationship between the change in Islamic finance and the change in the economy growth as the estimated impact of Islamic finance is (4.15E-10), that is, there is a positive relationship between the effect of the change in Islamic finance and the change in economic growth rate. This result is consistent with the literature or the financial and economic theories which found a positive relationship between Islamic finance and GNP. According to the test T-Test, this result has a statistical significance at the level (1%) i.e. the confidence level for this variable is equal to (99%) indicating the acceptance of the hypothesis, which stipulates the presence of the relation between the Islamic finance and GDP. COPY RIGHT 2015 Institute of Interdisciplinary Business Research 27

19 5. Conclusions: This study shows the following: 1. There is a statistically significant relationship between the Islamic finance and GDP. This result entails not only the expansion of Islamic finance but also the derivation of new Islamic financial instruments to boost the GDP. 2.There is a statistically significant positive correlation between Islamic finance and domestic investment, and this means the possibility of handling the weakness of the domestic investment in the developing countries through the expansion of the Islamic financing with Islamic financial instruments, and the use of Islamic financial engineering to derive new financial instruments. 3. There is a statistically significant negative correlation between Islamic finance and the rate of inflation. This means that Islamic finance is a real financing of goods and services, or there is a need for the production of new goods and services in the economic field. 4. There is a statistically significant positive correlation between Islamic finance and the economic growth rate. This emphasizes the positive effect of the Islamic finance on the GDP and domestic investment which boost the pace of the economy that enhances the economic growth. Finally, the study recommends the need to take care of the role of Islamic finance, the derivation of new Islamic financial instruments, and enhancing the study of Islamic financial engineering in institutes and colleges at universities. It also recommends conducting further studies in this area besides finding professional, efficient researchers and experts who can derive new tools from the Quran and Prophet s Sunnah. COPY RIGHT 2015 Institute of Interdisciplinary Business Research 28

20 References: Adnan A. Al Bahar(1999), Islamic Finance and Investment, Proceedings of the Second Harvard University Forum on Islamic Finance: Islamic Finance into the 21st CenturyCambridge, Massachusetts. Center for Middle Eastern Studies, Harvard University, pp Al-Qudah, Ali & Jaradat, Ali,(2013),The Impact of Macroeconomic Variables and Banks Characteristics on Jordanian Islamic Banks Profitability: Empirical Evidence, International Business Research; Vol. 6, No. 10,Published by Canadian Center of Science and Education Attia Alawneh, (2012). Building a Model of the National Investment with a Focus on the Phenomenon of Capital, PhD Thesis, Amman Arab University. El-Beltagy, Mohammed, proposals for financing small enterprises and the accounting treatment of the sharing formula ending with ownership, the 12th annual conference of the Arab Academy for Banking and Financial Sciences, 29-31, May 2005, Amman, Jordan. Gudarzi Farahani, Yazdan1 and Sadr, Seyed Mohammad Hossein (2012), Analysis of Islamic Bank s Financing and Economic Growth: Case Study Iran and Indonesia, Journal of Economic Cooperation and Development, 33,4 pp 1-24 Ismail, Traad, (2003), the Third World Islamic economics conference, organized by the Faculty of Sharia and Islamic Studies at the University of Umm Al-Qura - Mecca, p S7-8 Jordan Central Bank, various issues. Jordan Islamic Bank,yearly reports, various Issues. Jordanian General Statistics Department, various issues. M. Kabir Hassan and Abdel-Hameed M. Bashir(2000) Determinants of Islamic Banking Profitability, COPY RIGHT 2015 Institute of Interdisciplinary Business Research 29

21 Mohammad Javad Mohagheghniya, Faramarz Khalighi, Ahmad Bakhtiyari, Investigating the Effects of Islamic Banking Contracts on Economic Growth of Iran, International Letters of Social and Humanistic Sciences, 30(2),pp Mosab I. Tabash1, Raj S. Dhankar (2014) Islamic Banking and Economic Growth: an EMPIRCAL Evidence From Qatar,Journal of Applied Economics and Business,Vol.2,Issue 1,pp Mosab I. Tabasha, Raj S. Dhankar(2014 )Islamic Financial Development and Economic Growth-- Empirical Evidence from United Arab Emirates, Journal of Emerging Economies and Islamic Research, Vol. 2, No. 3. pp1-16 Solarin Sakiru Adebola and Wan Sulaiman Wan Yusoff (2011), The Impact of Macroeconomic Variables on Islamic Banks Financing in Malaysia Research Journal of Finance and Accounting Vol 2, No 4pp COPY RIGHT 2015 Institute of Interdisciplinary Business Research 30