Abstract
The objective of this study is to assess the impact of Islamic
financing modes on employment through asset formation and value
creation of Islamic Banking in Punjab, Pakistan. Data was collected from
two randomly selected Islamic Banks in Pakistan namely Meezan Bank
and Al-Baraka Bank (Pakistan) Ltd. Multistage sampling procedure was
used for selection of sample respondents from three regions of Punjab. List
frame of the study consisted of respondents/firms utilizing finance from
selected Islamic Banks located in each district. The sample of the study
comprised of 206 small and medium firms who utilized Islamic modes
of financing to get financing for their business. Variables of the model
comprised of employment generation, asset formation, technology, firm
age and business size. Least square regression model was used for analysis
of the cross sectional data. All the independent variables of the model have
significant effect on dependent variable. Empirical results revealed that
only asset formation has direct relationship with employment generation.
Technology, firm age and business size have inverse relationship with
employment generation capacity of the borrowing firms utilizing Islamic
finance. The study concluded that in Pakistan, the SME’s used financing
tool to enhance the assets by adopting the technological change. The
results of the study will support policy makers, practitioners and planners
to make more informed business decisions.
Arshad Mahmood Malik, Bilal Ashraf. (2019) Islamic Banks’ Financing and Employment Generation: The Case of Punjab, Pakistan, Journal of Islamic Business and Management, Vol ume 9, Issue 1.
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