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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...

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Main Authors: Gani Ibrahim Musa,, Zakaria Bahari,, Azreen Hamiza Abdul Aziz,
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2020
Online Access:http://journalarticle.ukm.my/16874/1/jeko_54%282%29-8.pdf
http://journalarticle.ukm.my/16874/
https://www.ukm.my/fep/jem/content/2020-2.html
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spelling my-ukm.journal.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
institution Universiti Kebangsaan Malaysia
building Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
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.
format Article
author Gani Ibrahim Musa,
Zakaria Bahari,
Azreen Hamiza Abdul Aziz,
spellingShingle Gani Ibrahim Musa,
Zakaria Bahari,
Azreen Hamiza Abdul Aziz,
The impact of Islamic capital market on Malaysian real economy
author_facet Gani Ibrahim Musa,
Zakaria Bahari,
Azreen Hamiza Abdul Aziz,
author_sort Gani Ibrahim Musa,
title The impact of Islamic capital market on Malaysian real economy
title_short 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_sort impact of islamic capital market on malaysian real economy
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2020
url http://journalarticle.ukm.my/16874/1/jeko_54%282%29-8.pdf
http://journalarticle.ukm.my/16874/
https://www.ukm.my/fep/jem/content/2020-2.html
_version_ 1703961602503475200
score 13.211869

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