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Impact of Islamic Investment Trend on Economic Growth-A Case Study of Pakistan

Author Affiliations

  • 1Department of Business Administration and Commerce, Indus University, ST-2D, Block 17, Gulshan-e-Iqbal, Karachi, PAKISTAN
  • 2 Department of Business Administration, Iqra University, Main Campus, Defence View, Shaheed-e-Millat Road (Ext.), Karachi, PAKISTAN
  • 3 Department of Business Administration, Iqra University, Gulshan Campus, Abid Town, Block-2, Gulshan-e-Iqbal, Karachi, PAKISTAN

Res. J. Management Sci., Volume 3, Issue (8), Pages 8-17, August,6 (2014)


For the last more than a decade, Islamic Banking System has been a centre of point in research area. Even in Pakistan, since 2002 onwards there has been a continuous growth found in the field of Islamic Banking System. This research was conducted to examine the impact of Islamic Investment Trend that has been present in Pakistan for more than a decade, on economic growth of Pakistan. For this purpose, the sample size of 200 observations based on quarterly data for the period of 2002 to 2012 has been selected. The data was collected from State Bank of Pakistan, Islamic Banking Bulletin and Economic Survey of Pakistan. The study was investigated on the basis of four predictors: Deposit of Islamic Bank (main variable), Inflation Rate, Interest Rate and Foreign Direct Investment (control variable) and Dependent Variable: Advances of Scheduled Banks by applying Auto Regressive Distributed Lag Model. The result revealed that Deposits of Islamic Banks at 4 different lags significantly play role in predicting the Economic Growth. Furthermore, results can be more significant if other modes of Islamic finance are also taken into consideration for the relevant research. Future research can be conducted by involving other factors effecting economic growth of a country i.e. Political Instability, Cost of Inputs for production, Foreign Trade Policy, Human Resource Development and Productivity, Unemployment and Government Expenditure with longer time period and larger sample size.


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