Economics at your fingertips  

Is Islamic Banking More Procyclical? Cross-Country Evidence

Laurent Weill () and Alexandra Zins ()
Additional contact information
Alexandra Zins: University of Strasbourg

Comparative Economic Studies, 2021, vol. 63, issue 2, No 6, 318-335

Abstract: Abstract This paper investigates the cyclicality of Islamic banking relative to conventional banking. It examines whether loan growth and profitability have a different sensitivity to economic growth for Islamic banks and for conventional banks. We used panel data from 525 banks covering 16 countries with dual banking systems spanning the period from 2008 to 2018. We found no difference in lending cyclicality: Islamic banks and conventional banks both have procyclical lending behavior. Profitability, on the other hand, is procyclical for Islamic banks but not for conventional banks. Our findings support the view that Islamic banking presence does not contribute to strengthened economic stability.

Keywords: Islamic banking; Loan growth; Financial stability; Bank profitability; Business cycles; Procyclicality (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Is Islamic Banking More Procyclical? Cross-Country Evidence (2020) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41294/PS2

DOI: 10.1057/s41294-020-00143-y

Access Statistics for this article

Comparative Economic Studies is currently edited by Nauro Campos

More articles in Comparative Economic Studies from Palgrave Macmillan, Association for Comparative Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2023-03-07
Handle: RePEc:pal:compes:v:63:y:2021:i:2:d:10.1057_s41294-020-00143-y