What drives the banking competition in Islamic finance oriented countries? Islamic vs conventional banks

Alimshan Faizulayev · Isah Wada · Asset Kyzdarbekova · Indira Parmankulova

20 citations0/0 files storedJournal of Islamic accounting and business research

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Islamic Finance and Banking Studies Banking stability, regulation, efficiency Banking Sector Performance and Management

Abstract

Purpose This study aims to examine the dynamics of banking competition between Islamic banks (IBs) and conventional banks (CBs) in emerging finance-oriented Islamic economies, also known as the QISMUT + 3 (i.e. Qatar, Indonesia, Saudi Arabia, Malaysia, the United Arab Emirates, Turkey, Bahrein, Kuwait and Pakistan). The main aim was to conduct a comparative market power analysis between IBs and CBs in the 2006–2015 period. Design/methodology/approach The study used bank-specific and macro-economic variables available in the Orbis Bank Focus and the World Bank databases. The study applied a dynamic approach to detect endogeneity problems and unobserved heterogeneity using the two-step system GMM estimate. Findings The research shows that market power persists in both types of banks over time. It also demonstrates that capital adequacy does not explain the market power of banking in the studied countries. Unlike IBs, the scale of banking does not influence the market power CBs. Corruption undermines competition in the conventional banking system. However, because of the ideological orientation of IBs, corruption does not affect their competitiveness. IBs outperform CBs in QISMUT + 3 countries in terms of banking competitiveness. They also have higher persistency of market power in the region. Practical implications This study is a very beneficial source of information that can provide effective guidelines for efficient productivity and improved competitiveness of IBs and CBs in finance-oriented Islamic countries. Originality/value The study is the first to compare the market power of IBs and CBs in this country classification. In addition, the study examined a large number of IBs and CBs to carry out this research.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 20 citations exist upstream.

References

1998Initial conditions and moment restrictions in dynamic panel data models 1995Another look at the instrumental variable estimation of error-components models 1957The Measurement of Productive Efficiency 1995Initial conditions and moment restrictions in dynamic panel data models 2009How to do Xtabond2: An Introduction to Difference and System GMM in Stata 1997Problem loans and cost efficiency in commercial banks 1969Information and Efficiency: Another Viewpoint 1972Information and Efficiency:Another Viewpoint

Cited by

2022The drivers of financial vulnerability and profitability: evidence from conventional and Islamic banks in Islamic finance-oriented countries

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.