Abstract
The purpose of this paper is to investigate the relationship
between Islamic banking and industrial production by decomposing
Islamic financing (IF) into profit and loss sharing (PLS) and non-profit
and loss sharing (non-PLS) modes of financing. The results reveal that IF
plays an important role in boosting industrial production in the short runs, as
well as in the long run. Moreover, this positive effect mainly comes from
non-PLS financing. In contrast, no significant relationship was found between
PLS financing and industrial development neither in the short-run nor in the
long-run. The originality of this study lies in decomposing Islamic Banks
financing into PLS financing and non-PLS financing to access the
contribution of each mode of financing in industrial development.
Syed Muhammad Shuj, Muhammad Usman Arshad, Muhammad Zubair Tariq. (2021) The Association Between Islamic Mode of Financing and Industrial Production: a Case From Pakistan, Epistemology: Journal of Islamic Studies, Volume-08, Issue-1.
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