Determinants of Islamic bank financing in Malaysia: an empirical study using linear and nonlinear ARDL model

This paper examines the dynamics relationship between the Islamic bank financing and selected macroeconomic variables in Malaysia using monthly data covering the period of January 2007 to June 2016. Utilizing both linear and non-linear ARDL method, the results show that there is no long-run relation...

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Main Authors:	Bakri Abdul Karim, Zulkefly Abdul Karim, Muhammad Hafiz Mohd Shukr
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2017
Online Access:	http://journalarticle.ukm.my/11610/ http://journalarticle.ukm.my/11610/ http://journalarticle.ukm.my/11610/1/jeko_51%282%29-2.pdf

id	ukm-11610
recordtype	eprints
spelling	ukm-116102018-04-24T01:49:16Z http://journalarticle.ukm.my/11610/ Determinants of Islamic bank financing in Malaysia: an empirical study using linear and nonlinear ARDL model Bakri Abdul Karim, Zulkefly Abdul Karim, Muhammad Hafiz Mohd Shukr, This paper examines the dynamics relationship between the Islamic bank financing and selected macroeconomic variables in Malaysia using monthly data covering the period of January 2007 to June 2016. Utilizing both linear and non-linear ARDL method, the results show that there is no long-run relationship among the variables. The results also indicate that there is no presence of both long-run and short-run asymmetric effects from industrial production index and rate of financing towards Islamic bank financing. In addition, Granger-causality test also shows no causality running from these factors to Islamic bank financing. Therefore, we conclude that to some extent the Islamic bank financing is stable and resilient. Muslims customers continue to support the Islamic banking and are not profit-motivated by the substitution effect as Malaysia has dual banking system. The banking system which based on profit sharing is able to cushion the Islamic financial system from interest rate and economics fluctuation thus reducing the risk of financial volatility. Penerbit Universiti Kebangsaan Malaysia 2017 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/11610/1/jeko_51%282%29-2.pdf Bakri Abdul Karim, and Zulkefly Abdul Karim, and Muhammad Hafiz Mohd Shukr, (2017) Determinants of Islamic bank financing in Malaysia: an empirical study using linear and nonlinear ARDL model. Jurnal Ekonomi Malaysia, 51 (2). pp. 17-26. ISSN 0127-1962 http://www.ukm.my/fep/jem/content/2017-2.html
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	This paper examines the dynamics relationship between the Islamic bank financing and selected macroeconomic variables in Malaysia using monthly data covering the period of January 2007 to June 2016. Utilizing both linear and non-linear ARDL method, the results show that there is no long-run relationship among the variables. The results also indicate that there is no presence of both long-run and short-run asymmetric effects from industrial production index and rate of financing towards Islamic bank financing. In addition, Granger-causality test also shows no causality running from these factors to Islamic bank financing. Therefore, we conclude that to some extent the Islamic bank financing is stable and resilient. Muslims customers continue to support the Islamic banking and are not profit-motivated by the substitution effect as Malaysia has dual banking system. The banking system which based on profit sharing is able to cushion the Islamic financial system from interest rate and economics fluctuation thus reducing the risk of financial volatility.
format	Article
author	Bakri Abdul Karim, Zulkefly Abdul Karim, Muhammad Hafiz Mohd Shukr,
spellingShingle	Bakri Abdul Karim, Zulkefly Abdul Karim, Muhammad Hafiz Mohd Shukr, Determinants of Islamic bank financing in Malaysia: an empirical study using linear and nonlinear ARDL model
author_facet	Bakri Abdul Karim, Zulkefly Abdul Karim, Muhammad Hafiz Mohd Shukr,
author_sort	Bakri Abdul Karim,
title	Determinants of Islamic bank financing in Malaysia: an empirical study using linear and nonlinear ARDL model
title_short	Determinants of Islamic bank financing in Malaysia: an empirical study using linear and nonlinear ARDL model
title_full	Determinants of Islamic bank financing in Malaysia: an empirical study using linear and nonlinear ARDL model
title_fullStr	Determinants of Islamic bank financing in Malaysia: an empirical study using linear and nonlinear ARDL model
title_full_unstemmed	Determinants of Islamic bank financing in Malaysia: an empirical study using linear and nonlinear ARDL model
title_sort	determinants of islamic bank financing in malaysia: an empirical study using linear and nonlinear ardl model
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2017
url	http://journalarticle.ukm.my/11610/ http://journalarticle.ukm.my/11610/ http://journalarticle.ukm.my/11610/1/jeko_51%282%29-2.pdf
first_indexed	2023-09-18T20:00:44Z
last_indexed	2023-09-18T20:00:44Z
_version_	1777406831055863808

Determinants of Islamic bank financing in Malaysia: an empirical study using linear and nonlinear ARDL model

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