Islamic Economics Studies Bi-quarterly Journal

Analyzing Banking Facilities Effect on Private Investment in the Form of Exchange and Partnership Contracts

Document Type : Research Paper

Authors

1 Assistant Professor, Faculty of Economics, Payam -e-Noor University, Iran

2 M.A. in Islamic Economics, Payam-e-Noor University.

Abstract

Based on the literature of Islamic economics, the bank facility in the form of partnership contracts is effective on investment motivation comparing to exchange contracts because of their return variety and risk distribution between bank and investor. Due to this and the implementation of usury – Free Banking law in Iran, in this study banking facilities’ effect in the form of exchange and partnership contracts on Iran’s privet investment analyzed. Seasonal data for (1999- 2013) and the ARDL approach is used. The results show that the facilities in the form of exchange and partnership contracts has positive and significant effect on privet investment in long run. Although the effect of Partnership contracts’ facilities on privet investment is more than the facilities of exchange contracts but the difference is not significant. In addition, public investment and price index has negative effect on privet investment while GDP has positive effect.

Keywords

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Islamic Economics Studies Bi-quarterly Journal
Volume 12, Issue 2 - Serial Number 24
May 2020
Pages 233-261