The pre-eminence of Islamic finance from the perspective of economic growth has been a long-standing debate. In recent decades, there has been a paradigm shift from interest-based banking to Islamic financial system. This study intends to examine the dynamic interaction of Islamic financial depth (IFD), Islamic financial intermediation (IFI), and asset quality with economic growth in a dual banking system. The paper employs autoregressive distributive lag regression (ARDL), error correction model (ECM) and Granger causality to examine the long and short run linkage by using the quarterly data of Pakistan from 2005 to 2019. The authors run two models to analyze the relative importance of financial depths (Islamic and conventional), financial intermediation (Islamic and conventional), and asset quality of both financial systems. A long-run relationship flowing from finance to growth in both Islamic and conventional finance models has been observed in our study. Furthermore, the findings recommend that strong financial intermediation plays an imperative role in driving economic growth by both financial sectors. The presence of a higher degree of Islamic financial assets in the economy contributes towards economic growth in the short-run. The results show that asset quality possibly plays an important intervening role in the overall finance-growth nexus.

中文翻译：

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伊斯兰金融深度，金融中介与可持续经济增长：ARDL方法

从经济增长的角度来看，伊斯兰金融的卓越地位一直是一个长期存在的争论。在最近的几十年中，已经发生了从基于利息的银行向伊斯兰金融系统的转变。本研究旨在研究双重银行体系中伊斯兰金融深度（IFD），伊斯兰金融中介（IFI）和资产质量与经济增长之间的动态相互作用。本文采用自回归分布滞后回归（ARDL），纠错模型（ECM）和格兰杰因果关系，通过使用2005年至2019年巴基斯坦的季度数据来检验长期和短期联系。作者使用两个模型来分析相对重要性金融深度（伊斯兰和常规），金融中介（伊斯兰和常规）以及两个金融系统的资产质量之间的关系。在我们的研究中，观察到伊斯兰和传统金融模型中从金融流向增长的长期关系。此外，调查结果还建议，强有力的金融中介在推动两个金融部门的经济增长中都发挥着至关重要的作用。在经济中存在较高程度的伊斯兰金融资产有助于短期内实现经济增长。结果表明，资产质量可能在整个金融增长联系中起着重要的干预作用。在经济中存在较高程度的伊斯兰金融资产有助于短期内实现经济增长。结果表明，资产质量可能在整个金融增长联系中起着重要的干预作用。在经济中存在较高程度的伊斯兰金融资产有助于短期内实现经济增长。结果表明，资产质量可能在整个金融增长联系中起着重要的干预作用。