Investigating the Impact of Islamic Financial Development on the Economic Growth of Iranian Provinces (with Panel Data Approach)

The distribution of banks’ resources in the interest-free banking system (without usury) is done through banking facilities (financial assistance programs), and efficient financial markets are among the important procedures in the procedure of economic growth. According to economists, without an effective and efficient financial sector, financial development and subsequent economic growth cannot be achieved. Therefore, studying the complementary role of the financial market and the bank is the most appropriate way to examine the relationship between financial development and economic growth in economic growth and development. Therefore, the main purpose of this study is to explain the effect of Islamic financial development on the economic growth of Iranian provinces. In order to analyze the data, the econometric method of panel data (Panel Data) has been analyzed using the Eviews9 software environment. The results indicate that Islamic financial development in the long term has a positive and significant effect on the economic growth of the provinces. The results of the coefficient of variables of the ratio of distribution of bank facilities (financial assistance programs) to GDP (Qarz al-Hasna “Arabic: القرض الحسن‎ , benevolent lending”, partnership and exchange) are also positive and significant. The increasing of the ratio of granting exchange facilities to GDP, according to the estimated coefficient of variables, has a positive and stronger effect than participatory facilities on the economic growth of the provinces. Therefore, the policymakers of the country’s financial system must pay close attention to the types of exchange contracts in the country’s financial system for economic booms (prosperity).