Islamic Banking and Real Investment Returns: Evidence from Nigeria
This study investigates the operation of Islamic banking and real investment returns, with a view to examining the prospect of interest-free banking in a multireligious society like Nigeria. We employ a secondary time series data point of monthly and weekly frequencies for the period of January to D...
| Authors: | ; |
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| Format: | Electronic Article |
| Language: | English |
| Check availability: | HBZ Gateway |
| Journals Online & Print: | Drawer...
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| Fernleihe: | Fernleihe für die Fachinformationsdienste |
| Published: |
De Gruyter, Versita
2014
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| In: |
The Journal of Rotterdam Islamic and Social Sciences
Year: 2014, Volume: 5, Issue: 1, Pages: 1-16 |
| Further subjects: | B
islamic banking
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| Online Access: |
Volltext (lizenzpflichtig) |
| Summary: | This study investigates the operation of Islamic banking and real investment returns, with a view to examining the prospect of interest-free banking in a multireligious society like Nigeria. We employ a secondary time series data point of monthly and weekly frequencies for the period of January to December 2013. After ascertaining the stationarity of the series, we conduct trend analyses and descriptive statistics that are highly revealing. More importantly, the Vector Error Correction Modeling (VECM) method shows the short-run dynamics of Islamic banking operations and real investment returns in Nigeria since cointegrating equations were obtained for the long-run equilibrium condition of the model. In the short run, all the Islamic banking instruments negatively relates to investment returns, including the instruments of ijarah and musharakah. These confirm the interest-free banking nature of Islamic banking products. But in the long-run, these instruments are positively related to real investment returns while those of qard (loan) and murabah and istisna (purchase and resale and manufacture respectively) are still negatively related. The trend analyses show, however that murabaha, which is a contract for purchase and resale of Shariah-compliant assets, and ijarah, which is the operating lease, are the Islamic banking instruments that are used the most. This use further engenders assets acquisition, real investment and general improvement of people’s welfare and economic conditions. Hence, it supports the prospect of interest-free banking in Nigeria. |
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| ISSN: | 2199-6172 |
| Contains: | Enthalten in: The Journal of Rotterdam Islamic and Social Sciences
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