The impact of debt -based financing modes and musharakah on financial stability of Islamic banks : applied study

Abstract EN

This paper discusses the impact of Islamic financing formulas with debits and shares on the financial stability of Islamic banks, and the hypothesis of the study is that there is a direct relationship between financing in the forms of participations and financial stability in Islamic banks, and an inverse relationship between financing in the forms of debts and financial stability in Islamic banks.

These hypotheses were tested using longitudinal panel data, and the fixed effect model was used in the estimation.

The study concluded that the previous hypothesis was correct.

The study concluded that it is in the interest of Islamic banks to use the partnership financing method as a basic formula in project financing.

To achieve the highest financial stability.

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Key words: Islamic financing modes, Financial Stability, Islamic Banks, Musharakah financing, debt -based financing modes.