Examining the relationship between development of Islamic Financial Systems and Foreign Direct Investment

International business and corporations’ development are influenced by economic variables, so we are going to investigate the relationship between Islamic Financial System Development (IFSD) and Foreign Direct Investment (FDI) based on the methods named data panel techniques including Panel Unit Roots, Panel Co-integration Test, Panel Multivariate Error Correction Model, and Panel Granger Causality. In this research, foreign direct investment related data are gathered from an informational package containing global development factors published by World Bank and UNCTAD informational database in 2015. Meanwhile, four indexes including balance, integration, acceptance, and continuity are available to analyze Islamic Financial System Development based on Islamic development bank latest reports. Result showed an analytical positive and meaningful correlation between foreign direct investment and Islamic Financial System Development during long term and short term periods. Moreover, other evidence explains Granger Strong Causality relationship between the two stated variables. Finally, in order to take more benefit, it is suggested that the exact rule and policy should be run and the fixed exchange rate should be stablished during a financial period.