The impact of Islamic capital market on Malaysian real economy
The primary purpose of the financial sector of an economy is financial intermediation. Financial intermediation activities of channelling funds from surplus to the deficit units in the economy including through capital market affect the economic growth of a country. The role of Islamic capital m...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2020
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| Online Access: | http://journalarticle.ukm.my/16874/1/jeko_54%282%29-8.pdf |
| _version_ | 1796932548237983744 |
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| author | Gani Ibrahim Musa, Zakaria Bahari, Azreen Hamiza Abdul Aziz, |
| author_facet | Gani Ibrahim Musa, Zakaria Bahari, Azreen Hamiza Abdul Aziz, |
| author_sort | Gani Ibrahim Musa, |
| collection | UKM |
| description | The primary purpose of the financial sector of an economy is financial intermediation. Financial intermediation
activities of channelling funds from surplus to the deficit units in the economy including through capital market affect
the economic growth of a country. The role of Islamic capital market in the process of affecting the growth of an
economy is another dimension in finance-growth nexus. This study empirically examines the impact of Islamic capital
market on Malaysian economy. It employs the ARDL bounds test approach for cointegration. The results revealed
that in the long-run, Islamic capital market contributes to the Malaysian economy by way of capital formation and
the efficiency of the capital served as channels of transmitting growth. However, in the short run, only Islamic capital
market measure of Islamic stock market turnover contributes to the economy with productivity of capital as the only
channel of transmitting growth. Moreover, there is evidence of causality between the Islamic capital market turnover
and the Malaysian economy. The findings imply that the Islamic capital market effectively channelled and pooled funds
to productive investment activities. It further proves the notion that in general, Islamic finance is more inclined towards
real sector growth as compared to conventional counterpart due to the emphasis on equity-based financing as opposed
to debt-based financing. |
| first_indexed | 2024-03-06T04:34:08Z |
| format | Article |
| id | ukm.eprints-16874 |
| institution | Universiti Kebangsaan Malaysia |
| language | English |
| last_indexed | 2024-03-06T04:34:08Z |
| publishDate | 2020 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| record_format | dspace |
| spelling | ukm.eprints-168742021-06-24T16:25:47Z http://journalarticle.ukm.my/16874/ The impact of Islamic capital market on Malaysian real economy Gani Ibrahim Musa, Zakaria Bahari, Azreen Hamiza Abdul Aziz, The primary purpose of the financial sector of an economy is financial intermediation. Financial intermediation activities of channelling funds from surplus to the deficit units in the economy including through capital market affect the economic growth of a country. The role of Islamic capital market in the process of affecting the growth of an economy is another dimension in finance-growth nexus. This study empirically examines the impact of Islamic capital market on Malaysian economy. It employs the ARDL bounds test approach for cointegration. The results revealed that in the long-run, Islamic capital market contributes to the Malaysian economy by way of capital formation and the efficiency of the capital served as channels of transmitting growth. However, in the short run, only Islamic capital market measure of Islamic stock market turnover contributes to the economy with productivity of capital as the only channel of transmitting growth. Moreover, there is evidence of causality between the Islamic capital market turnover and the Malaysian economy. The findings imply that the Islamic capital market effectively channelled and pooled funds to productive investment activities. It further proves the notion that in general, Islamic finance is more inclined towards real sector growth as compared to conventional counterpart due to the emphasis on equity-based financing as opposed to debt-based financing. Penerbit Universiti Kebangsaan Malaysia 2020 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/16874/1/jeko_54%282%29-8.pdf Gani Ibrahim Musa, and Zakaria Bahari, and Azreen Hamiza Abdul Aziz, (2020) The impact of Islamic capital market on Malaysian real economy. Jurnal Ekonomi Malaysia, 54 (2). pp. 91-103. ISSN 0127-1962 https://www.ukm.my/fep/jem/content/2020-2.html |
| spellingShingle | Gani Ibrahim Musa, Zakaria Bahari, Azreen Hamiza Abdul Aziz, The impact of Islamic capital market on Malaysian real economy |
| title | The impact of Islamic capital market on Malaysian real economy |
| title_full | The impact of Islamic capital market on Malaysian real economy |
| title_fullStr | The impact of Islamic capital market on Malaysian real economy |
| title_full_unstemmed | The impact of Islamic capital market on Malaysian real economy |
| title_short | The impact of Islamic capital market on Malaysian real economy |
| title_sort | impact of islamic capital market on malaysian real economy |
| url | http://journalarticle.ukm.my/16874/1/jeko_54%282%29-8.pdf |
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