Revisiting the Contribution of Islamic Banks’ Financing to Economic Growth: The Indonesian Experience

The contribution of Islamic banking towards economic growth remains debatable amongst academicians and practitioners. This study investigates the relationship between banks’ financing in Indonesia which is largest Muslim population country. adopts Autoregressive-Distributed Lag (ARDL) utilizes time-series quarterly data from 2011Q1 to 2019Q3. uses four predictors: deposit ratio; inflation; gross capital fixed formation; trade openness. results auto-regressive distributed lag model indicate that, long-run, banks' has a significant impact on Indonesian economy. However, short-run, does not make substantial growth. study’s key implication that by banks still makes limited Indonesia. enhances literature review, specifically evaluating Numerous existing studies this topic covering crisis period data, might suffer bias. Therefore, addresses topic, excluding global financial crises such as 1998, 2008, 2020, demonstrate evident