AN EMPIRICAL ANALYSIS OF THE INFLUENCE OF ISLAMIC FINANCE ON PAKISTAN’S ECONOMIC GROWTH FROM 2015 TO 2024

Hafiz Muhammad Abdullah Khan; Riza Ali Shah; Dr Muhammad Muzammil

doi:10.71146/kjmr478

Authors

Hafiz Muhammad Abdullah Khan Research Scholar, Karachi University Business School [KUBS] University of Karachi, Pakistan. Author
Riza Ali Shah Research Scholar, Karachi University Business School [KUBS] University of Karachi, Pakistan. Author
Dr Muhammad Muzammil Assistant Professor, Karachi University Business School [KUBS] University of Karachi, Pakistan. Author

DOI:

https://doi.org/10.71146/kjmr478

Keywords:

Islamic Finance, Economic Growth, Shariah-Compliant Finance, Islamic Banking, Financial Inclusion, Global Islamic Finance

Abstract

Islamic finance has emerged as a significant contributor to economic growth in various countries, including Pakistan. This study examines the relationship between Islamic finance and economic growth using recent data and empirical evidence. The research employs econometric techniques, including cointegration and Granger causality tests, to determine the direction and strength of the relationship between Islamic financial development and economic performance in Pakistan. The findings indicate a bidirectional relationship, suggesting that the growth of Islamic finance positively influences economic development while economic expansion fosters the demand for Islamic financial services. The study highlights policy implications and suggests ways to enhance the contribution of Islamic finance to sustainable economic growth.