The Influence of Islamic Banking Performance on Economic Growth

By answering the main research question �does Islamic banking performance have positive and significant influence on Indonesian economic growth,� this study helps Indonesian policy makers and contributes to the existing literature on the effect of Islamic banking on economic growth. Using multiple-regression analysis during 2006-2012 with six financial ratios as independent variables, the finding shows that the influence of Islamic banking is not significant. Furthermore, there is a puzzle that needs to be solved regarding whether the influence of Islamic banking on Indonesian economic growth is positive, zero, or negative. For this, further research is essential.