The Impact of Macroeconomic Variables on the Performance of Islamic Banks: an Empirical Study
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Autores: Bader Mustafa Mahmoud Al Sharif
- Localización: International Journal of Professional Business Review: Int. J. Prof.Bus. Rev., ISSN 2525-3654, ISSN-e 2525-3654, Vol. 8, Nº. 4, 2023 (Ejemplar dedicado a: Continuous publication; e01852)
- Idioma: inglés
- Enlaces
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Resumen
Purpose: The study examines the impact of macroeconomic variables (economic growth, public debt growth, inflation, foreign direct investment, and balance of payments) on the performance of Islamic banks (return on assets, return on equity, and return on equity).
Theoretical framework: These economic changes have also reduced the level of working capital in financial institutions, including Islamic banks, making it difficult for them to determine the best course of action (Kotz, 2009).
Design/methodology/approach: The study used multiple linear regression analyses of periodic data for Jordanian Islamic banks in Jordan during the period (2007-2021).
Findings: The findings demonstrated a positive correlation between macroeconomic factors and performance, except for foreign direct investments, which have a negative effect on performance because they require the use of external financial resources. This means that the country's use of expansionary fiscal policy or expansionary monetary policy leads to better performance.
Research, Practical & Social implications: The researcher points out that the government should use an expansionary fiscal and monetary policy, and foreign investors should use the funds of Islamic banks in financing and investments to improve the performance of Islamic banks.
Originality/value: The performance of Islamic banks will improve despite the high rates of inflation, public debt and balance of payments, and the decline in foreign direct investment.
