Predicting the Role of Islamic Banking on Sustainable Economic Development: An Analysis for Turkey With ARIMA Model

Introduction

Economic growth is one of the most important goals of a country. In an economically developing country, both trade is developing and new business opportunities are emerging. As a result, the profitability of the companies will increase (Afonso and Aubyn, 2019; Raju et al., 2020). In addition, the unemployment rate in the country will decrease. In summary, the quality of life of people living in the country will improve. Therefore, almost all countries are developing strategies to increase their economic growth (Dean et al., 2019; Pao and Chen, 2019; Roudi et al., 2019). For example, some of them give importance to technological infrastructure and research and development activities, while others try to attract the attention of foreign investors (Dinçer et al., 2019a).

The most important issue in this process is to ensure the efficiency and continuity of economic growth. If a country is growing economically, and this is not reflected in the citizens, economic growth in that country is ineffective (Ahmed et al., 2019; Klofsten et al., 2019). Therefore, it is important to ensure economic equality in the country. On the other hand, economic growth also needs to be continuous. In this context, while the country is growing economically, this situation should be provided by investments (Mardani et al., 2019; Arifovic et al., 2019; Klimek et al., 2019). In this way, the economic development of the country will be healthier (Dinçer et al., 2018a; Kalkavan and Ersin, 2019). In other words, it is important that a country grows more slowly and moderately rather than fast but unhealthy.

Another condition for countries to have sustainable economic growth is that they have efficient financial markets. In financial markets, those who have funds and those who need funds can come together. Those in need of funds can easily meet these needs through financial markets (Bekaert and Mehl, 2019; Buss and Dumas, 2019; Dinçer and Yüksel, 2018a). Thus, the amount of investment in the country increases significantly. Moreover, this situation will contribute to the decrease in the unemployment rate as it will create new employment opportunities in the country. In addition, those who have funds will also have the opportunity to earn income through financial markets (Hong et al., 2019; Zou and Deng, 2019; Huang et al., 2019). Based on these issues, the effective functioning of the financial markets in a country will help the economic development of the country.

There are many different players in a country's financial system. As mentioned in the previous paragraphs, those who own and need funds are the most important players in this system. In addition, the state is an important player in the financial system (Graydon et al., 2019; Dinçer and Yüksel, 2019). Government regulations and the control of the parties' compliance with these regulations will make a significant contribution to the effective functioning of the financial system. In other words, in order for the financial system to function effectively, the state assumes the role of trust mechanism (Bendickson and Chandler, 2019; Dinçer et al., 2019g). The parties that rely on the legal regulations in the country will play an active role in the financial system and this will contribute to the development of the national economy.