Shariah compliant real estate investment and economic growth

Abstract

The Concept of Shariah compliant derive from Islamic law or the Shari'ah law, the roots of which in turn are derived from the: first Qu'ran,; second sunna, which are the binding authority of his maxims and decisions; third ijma, or consensus of the community of scholars; and finally qiyas, or analogical assumptions and reasoning. This study aims to examine the relationship between Shariah compliant real estate investment and economic growth in kingdom of Saudi Arabia, in addition investigating the effect (s) of Shariah compliant real estate on the GDP. Additionally, examine if other variables namely real estate development, and government expenditure interact with the real estate investment in the economic growth or GDP. We used an ordinary least squares (OLS) or linear least squares to analyze the data from 2002 to 2012 in Saudi Arabia. We found that real estate investment has a positive but non-significantly effects on economic growth. While the real estate investment has negative effects on gross domestic product. The main implications of this study is providing financial investment strategies for investors, where relying on the vision 2030. However the result of the study are limited due to the lack of availability of some other variables.