Islamic banking not significantly correlated with economic growth, study finds.
Islamic banking is growing rapidly worldwide, but its impact on economic growth is not clear. A study found that the presence of Islamic banks is mainly determined by the number of Muslims in a population. However, Islamic banks do not significantly affect economic growth. Countries with higher initial GDP per capita tend to grow more slowly, but this effect is less significant when considering the adoption of Islamic banking. Legal origin influences the correlation between Islamic banking and financial deepening, with negative effects for countries with British legal origin and positive effects for those with French legal origin.