The Role of Islamic Leadership Principles and Ethics in the Context of Finance-Growth Nexus in GCC Countries
DOI:
https://doi.org/10.58932/MULD0033Keywords:
Economic growth, financial development, GCC, Islamic leadershipAbstract
This paper investigates the role of Islamic leadership principles and ethics in the context of finance-growth nexus using balanced panel data from 6 Gulf Cooperation Council (GCC) countries for the 2002-2022 periods. The study employs a set of non-stationary panel data approaches to investigate the long-run relationships between the variables of interest. The findings show that there is a long-term relationship between the variables wherein financial development and Islamic leadership principles and ethics were found to have a significant positive impact on economic growth in GCC countries. This implies that financial development and Islamic leadership principles and ethics are important factors for promoting growth. Moreover, the results suggest that the effect of financial development on economic growth is contingent on the Islamic leadership principles and ethics in GCC countries. The interaction term and marginal effects computed are positive and significant at all levels of Islamic leadership principles and ethics. This means that the Islamic leadership principles and ethics have large direct and indirect positive impacts on economic growth in GCC countries.
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