This paper presents an empirical examination on the equilibrium relationships between macroeconomic variables (gross domestic product (GDP), foreign direct investment (FDI), and money supply (M2)) and Murabaha to the Purchase-Order (MPO), by using annual time series data for the 1978–2012 period. The Ng- Perron (2001) was applied to test the integration levels, while the bounds F-statistic test was used to examine the co-integration relationship among the variables. The autoregressive distributed lags (ARDL) approach was employed to examine long-run and short-run relationships between the variables. The results indicate that all variables are stationary at first difference and all variables are co-integrated. Further, the results of the ARDL indicate that there is a positive relationship between macroeconomic variables and MPO in long-run and short-run.

Various studies have been conducted to examine the causal relationship between economic growth and energy consumption among the countries that export and import energy sources but the discussions on the causal relationship between Islamic banking system performance and energy consumption are still lacking. The first aim of this paper is to provide some clarifications on the causal relationship between economic growths, GDP is used as a proxy of Jordan’s economic growth and energy consumption, and also between Islamic banking system performances, and Murabaha is used as a proxy of Jordanian Islamic Bank performance and energy consumption. The second aim is to explore how far the Islamic banking system direction from the economic growth direction when affected by some macroeconomic variables such as energy consumption. Jordan has been chosen as the country under study because it heavily relied on imported energy sources to meet its needs. In order to analyze the long and short-run relationship, the annual time series data were used by employing the autoregressive distributed lag model (ARDL). Meanwhile, the Augmented Dickey Fuller (ADF) (1987) and the Ng-Perron (2001) were used for stationary test. Additionally, the Bounds F-statistics test was employed for testing co-integration among the variables. The ARDL approach was used to analyze the long-run and short-run relationships and for exploring the causal relationship among variables, the Granger causality test was employed. Results from the analyses show that the economic growth and energy consumption as well between Islamic banking system performance and energy consumption indicate unidirectional causal relationships but not vice versa. Another main finding is that Islamic banking system direction moves with the same economic growth direction in Jordan when affected by the energy consumption. Keywords: energy consumption, GDP, Murabaha, Granger causality, Jordan

The first objective of this study is to examine short and long-run relationship between the banking system of Jordan as represented in conventional Banking System (CBS) and Islamic Banking System (IBS) with the macroeconomic variables as represented by Gross Domestic Product (GDP) and Money Supply (MS). The second objective of the study is to investigate the short-run relationship between banking system with the global events’ variables as represented by the Global Financial Crisis (D1) and the Arab Spring (D2). For analytical purposes, this study has employed ARDL approach on the sample gathered from the 1978-2013 period; also it used different tests such as ADF and P-P to detect the integration and bounds F-statistics test to investigate the co-integration among the variables. However, the results showed that, GDP and MS have positive relationship with both conventional and Islamic banking system in short and long run. Furthermore, the global events’ findings indicated that, Islamic banking system was less affected by the global financial crisis than conventional banking. On the other hand, the Arab Spring has a positive relationship with the banking system, because most of the refugee businesses and investments were transferred to Jordan because of the political stability of the country. Furthermore, the results of Granger causality test demonstrated that, Jordan’s banking system is based on the real economic activity, which is presented by GDP.