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Impact of Islamic Finance on Economic Growth in Egypt

Received: 25 March 2023     Accepted: 24 April 2023     Published: 10 May 2023
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Abstract

The importance of Islamic finance is increasing worldwide not only in countries which its majority are Muslims but also in countries where Muslims are minority such as Japan and the United Kingdom whereas the number of Islamic financial institutions has increased significantly in the Middle East and Southeast Asia, however, the literature that examined Islamic finance impact on the real economy is rare, thus, the aim of this paper is to examine the effect of Islamic finance, specifically Islamic banking, on economic growth and on investment in Egypt through two empirical models; the first one examines the impact of Islamic finance on economic growth and the second one examines the impact of Islamic finance on investment. For both models, the paper utilizes annual time series data during the period from 2002 up to 2021 and employs Autoregressive Distributed Lag (ARDL) bounds testing approach, and Error Correction Model (ECM). The results of the paper demonstrate that there is a significant positive relationship between Islamic finance and economic growth and between Islamic finance and investment in Egypt. The paper recommends increasing the accessibility to Islamic financial services by increasing the Islamic banks branches and ATMs and Islamic banks should care about marketing of its products.

Published in International Journal of Economics, Finance and Management Sciences (Volume 11, Issue 3)
DOI 10.11648/j.ijefm.20231103.12
Page(s) 93-103
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2023. Published by Science Publishing Group

Keywords

Islamic Finance, Economic Growth, Investment, ARDL Bounds Test, ECM, Egypt

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Cite This Article
  • APA Style

    Mohamed Fathy Abdelgany, Rahaf Mohammed Hussein. (2023). Impact of Islamic Finance on Economic Growth in Egypt. International Journal of Economics, Finance and Management Sciences, 11(3), 93-103. https://doi.org/10.11648/j.ijefm.20231103.12

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    ACS Style

    Mohamed Fathy Abdelgany; Rahaf Mohammed Hussein. Impact of Islamic Finance on Economic Growth in Egypt. Int. J. Econ. Finance Manag. Sci. 2023, 11(3), 93-103. doi: 10.11648/j.ijefm.20231103.12

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    AMA Style

    Mohamed Fathy Abdelgany, Rahaf Mohammed Hussein. Impact of Islamic Finance on Economic Growth in Egypt. Int J Econ Finance Manag Sci. 2023;11(3):93-103. doi: 10.11648/j.ijefm.20231103.12

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  • @article{10.11648/j.ijefm.20231103.12,
      author = {Mohamed Fathy Abdelgany and Rahaf Mohammed Hussein},
      title = {Impact of Islamic Finance on Economic Growth in Egypt},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {11},
      number = {3},
      pages = {93-103},
      doi = {10.11648/j.ijefm.20231103.12},
      url = {https://doi.org/10.11648/j.ijefm.20231103.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20231103.12},
      abstract = {The importance of Islamic finance is increasing worldwide not only in countries which its majority are Muslims but also in countries where Muslims are minority such as Japan and the United Kingdom whereas the number of Islamic financial institutions has increased significantly in the Middle East and Southeast Asia, however, the literature that examined Islamic finance impact on the real economy is rare, thus, the aim of this paper is to examine the effect of Islamic finance, specifically Islamic banking, on economic growth and on investment in Egypt through two empirical models; the first one examines the impact of Islamic finance on economic growth and the second one examines the impact of Islamic finance on investment. For both models, the paper utilizes annual time series data during the period from 2002 up to 2021 and employs Autoregressive Distributed Lag (ARDL) bounds testing approach, and Error Correction Model (ECM). The results of the paper demonstrate that there is a significant positive relationship between Islamic finance and economic growth and between Islamic finance and investment in Egypt. The paper recommends increasing the accessibility to Islamic financial services by increasing the Islamic banks branches and ATMs and Islamic banks should care about marketing of its products.},
     year = {2023}
    }
    

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  • TY  - JOUR
    T1  - Impact of Islamic Finance on Economic Growth in Egypt
    AU  - Mohamed Fathy Abdelgany
    AU  - Rahaf Mohammed Hussein
    Y1  - 2023/05/10
    PY  - 2023
    N1  - https://doi.org/10.11648/j.ijefm.20231103.12
    DO  - 10.11648/j.ijefm.20231103.12
    T2  - International Journal of Economics, Finance and Management Sciences
    JF  - International Journal of Economics, Finance and Management Sciences
    JO  - International Journal of Economics, Finance and Management Sciences
    SP  - 93
    EP  - 103
    PB  - Science Publishing Group
    SN  - 2326-9561
    UR  - https://doi.org/10.11648/j.ijefm.20231103.12
    AB  - The importance of Islamic finance is increasing worldwide not only in countries which its majority are Muslims but also in countries where Muslims are minority such as Japan and the United Kingdom whereas the number of Islamic financial institutions has increased significantly in the Middle East and Southeast Asia, however, the literature that examined Islamic finance impact on the real economy is rare, thus, the aim of this paper is to examine the effect of Islamic finance, specifically Islamic banking, on economic growth and on investment in Egypt through two empirical models; the first one examines the impact of Islamic finance on economic growth and the second one examines the impact of Islamic finance on investment. For both models, the paper utilizes annual time series data during the period from 2002 up to 2021 and employs Autoregressive Distributed Lag (ARDL) bounds testing approach, and Error Correction Model (ECM). The results of the paper demonstrate that there is a significant positive relationship between Islamic finance and economic growth and between Islamic finance and investment in Egypt. The paper recommends increasing the accessibility to Islamic financial services by increasing the Islamic banks branches and ATMs and Islamic banks should care about marketing of its products.
    VL  - 11
    IS  - 3
    ER  - 

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Author Information
  • Economics Department, Faculty of Politics and Economics, Beni-Suef University, Beni Suef, Egypt

  • Economics Department, Faculty of Politics and Economics, Beni-Suef University, Beni Suef, Egypt

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