Purpose -The purpose of this paper is to examine the short-run and the long-run relationships between Islamic banking development and economic growth in the case of Indonesia. Design/methodology/approach -Using quarterly data (2003:1-2010:2), this paper utilizes the bound testing approach of cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework. Findings -The results demonstrate a significant relationship in short-run and long-run periods between Islamic financial development and economic growth. The relationship, however, is neither Schumpeter's supply-leading nor Robinson's demand-following. It appears to be bi-directional relationship. Originality/value -This paper uses empirical evidence to show the role of Islamic banks' financing towards economic performance of a country. To the best of the authors' knowledge, the study on the role of Islamic banking development towards economic growth is limited, particularly in the context of Indonesia.

No abstract

Problem statement:The nature of Islamic banks is different from conventional banks which may lead to a different deposit behavior of their depositors. This study aims to analyze the dynamic effects of interest and profit rate changes, production level, inflation and financial crisis towards the fluctuation of total deposits in Malaysian Islamic banks. Approach: Using monthly data from January 2000 to December 2010, cointegration test and vector error correction model were utilized to uncover the dynamic relationship between macroeconomic variables and crisis with total deposit of Islamic banking. Results: The results show that changes in interest and profit rate as well as production growth has no significant effects. Meanwhile, inflation has negative effect on total deposits of Islamic banks which reflects the changes on depositors' consumption pattern during the recession. Interestingly, financial crisis is positively affecting total deposits in Islamic banks. Conclusion: This study provides evidence of general consumer sentiment and deposit behavior. It indicates that in general, due to the 1997/1998 financial crisis experience, bank depositors have trusted Islamic banking to be more resilient in facing financial crisis and hence, inflow of deposits to Islamic banks was happened during 2007/2008 financial crisis.

Problem statement:The nature of Islamic banks is different from conventional banks which may lead to a different deposit behavior of their depositors. This study aims to analyze the dynamic effects of interest and profit rate changes, production level, inflation and financial crisis towards the fluctuation of total deposits in Malaysian Islamic banks. Approach: Using monthly data from January 2000 to December 2010, cointegration test and vector error correction model were utilized to uncover the dynamic relationship between macroeconomic variables and crisis with total deposit of Islamic banking. Results: The results show that changes in interest and profit rate as well as production growth has no significant effects. Meanwhile, inflation has negative effect on total deposits of Islamic banks which reflects the changes on depositors' consumption pattern during the recession. Interestingly, financial crisis is positively affecting total deposits in Islamic banks. Conclusion: This study provides evidence of general consumer sentiment and deposit behavior. It indicates that in general, due to the 1997/1998 financial crisis experience, bank depositors have trusted Islamic banking to be more resilient in facing financial crisis and hence, inflow of deposits to Islamic banks was happened during 2007/2008 financial crisis.

Purpose -The purpose of this paper is to empirically explore market integration among five selected Association of Southeast Asian Nations (ASEAN) emerging markets (Malaysia, Thailand, Indonesia, the Philippines and Singapore) during the pre-and post-1997 financial crisis periods. Design/methodology/approach -Employs two-step estimation, cointegration and generalized method of moments (GMM). Findings -The study finds that the stock markets in the ASEAN region are cointegrated both during the pre-and post-1997 financial crisis. However, the markets are moving towards a greater integration, particularly during the post-1997 financial crisis. Finally, as measured by the error correction terms, except the emerging market of Indonesia, all other ASEAN markets appear to be the important bearers of short-run adjustment to a shock in the long-run equilibrium relationships in the region both during the pre-and post-crisis periods.Research limitations/implications -The study only focuses on stock markets of the five founding members of ASEAN, i.e. Malaysia, Indonesia, Thailand, Singapore and the Philippines. Practical implications -The paper reveals that unlike during the pre-crisis period, the long-run diversification benefits that can be earned by investors across the ASEAN markets in the post-crisis period tend to diminish. Originality/value -The study is among the first to use two-step estimation, cointegration and GMM to re-examine market integration either in the emerging or developed markets.

This study empirically examines market integration among five selected ASEAN (Association of South-east Asian Nations) emerging markets (i.e. Malaysia, Thailand, Indonesia, the Philippines, and Singapore) and their interdependencies from the US and Japan based on a two-step estimation, cointegration and Generalized Method of Moments (GMM). Closing daily stock indices starting from 1 January 1988 to 31 December 2006 are used. The study reveals that the ASEAN stock markets are going towards a greater integration either among themselves or with the US and Japan, particularly in the post-1997 financial turmoil. This implies that the long-run diversification benefits that can be gained by investors across the ASEAN markets tend to diminish. As for the long run causal relations between ASEAN stock markets with the US and Japan, the study discovers that Indonesia was relatively independent of both the US and Japan; Malaysia was more dependent on Japan rather than the US; Thailand was relatively independent of the US, but to some extent dependent on Japan; the Philippines is more affected by the US than Japan; and the US and Japan have bidirectional Granger causalities with Singapore.Stock market integration, cointegration, Generalized Method of Moments (GMM), diversification benefit, ASEAN-5,

This study investigates the efficiency and productivity performance of the national private banks in Indonesia during the period of 2002-2004. The data consist of 21 national private banks including two Islamic banks. Productivity is measured by the Malmquist Index using Data Envelopment Analysis (DEA) technique. Overall, the result shows that the Total Factor Production (TFP) Index of the national private banks has considerably increased for the whole industry, in which technical change is found to be a more important source of productivity growth to the Indonesian Banking Industry compared to efficiency change. Furthermore, the result also shows that the efficiency of two Islamic banks is above the average efficiency of the national private banks.

No abstract