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A study on finance-growth nexus in dual financial system countries: evidence from Bahrain

Abduh, Muhamad and Brahim, Said and Omar, Mohd. Azmi (2012) A study on finance-growth nexus in dual financial system countries: evidence from Bahrain. World Applied Sciences Journal , 20 (8). pp. 1166-1174. ISSN 1818-4952

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This study is aimed at examining the long run and short run relationships between both Islamic and conventional financial development with the economic growth in the Bahrain dual financial system. Using quarterly data (2000:1-2010:4) retrieved from Monthly Statistical Bulletin of Central bank of Bahrain (CBB) and International Financial Statistics (IFS) of International Monetary Funds (IMF), this paper employs the Johanson and Juselius Cointegration test and Vector Error Correction Model (VECM) to uncover the long-run and short-run relationship between Islamic and conventional financial deepening and economic growth. The results show a significant positive relationship between Islamic finance deepening and economic growth in the long run, however, there is no evidence on the short run relationship between them. The Islamic finance relationship with economic growth in Bahrain appears to be a bi-directional relationship. On the other hand, Bahraini conventional finance has a significant relationship with their economic growth, both in the long run and short run.

Item Type: Article (Journal)
Additional Information: 6777/28687
Subjects: B Philosophy. Psychology. Religion > BP Islam. Bahaism. Theosophy, etc > BP1 Islam > BP173.75 Islam and economics
H Social Sciences > HG Finance > HG1501 Banking
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Dr Muhamad Abduh
Date Deposited: 25 Feb 2013 10:39
Last Modified: 11 Jun 2013 19:04
URI: http://irep.iium.edu.my/id/eprint/28687

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