Islamic Banking and Financial Development

Lebdaoui, Hind; Wild, Joerg

doi:10.1515/rmeef-2015-0018

Cited by 9 publications

(9 citation statements)

References 22 publications

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“…They argue that engagements of IBs in Malaysia are mostly non‐participatory, whose effects are mostly short‐term. Lebdaoui and Wild (2016) empirically analysed whether EG is sensitive to Islamic banking presence in selected Southeast Asian economies. Utilizing panel auto‐regressive distributed lag approach, they ascertained that in the long‐run EG exhibit sensitivity towards Islamic banking presence.…”

Section: Literature Reviewmentioning

confidence: 99%

Exploring asymmetric relationship between Islamic banking development and economic growth in Pakistan: Fresh evidence from a non‐linear ARDL approach

et al. 2020

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Islamic banking has gleaned considerable attention recently owing to its quantum growth. This study examines the asymmetric association between Islamic banking development (IBD) and economic growth (EG) in Pakistan that spans 2007Q1 to 2017Q4. We apply the non‐linear autoregressive distributed lag (NARDL) model of Shin et al., (2014). Our findings confirm co‐integration between IBD and EG in Pakistan. The positive (negative) shocks of IBD have significant positive (negative) association with EG in the long‐run; however, only positive shocks have significant positive relationship with EG in the short run. We observe that the interconnection between IBD‐EG is asymmetric/non‐linear in the long‐run, whereas symmetric/linear in the short run. We conclude that unlike the linear models, the non‐linear models provide realistic results by capturing hidden asymmetries, thereby assisting policymakers in useful decision making.

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Section: Literature Reviewmentioning

confidence: 99%

Exploring asymmetric relationship between Islamic banking development and economic growth in Pakistan: Fresh evidence from a non‐linear ARDL approach

et al. 2020

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“…The underlying premise of these studies is that, if Islamic banks are demonstrated to be more efficient, more stable, and more profitable and their financing behavior less procyclical, they would contribute more positively to the well-functioning of the financial system and, consequently, the health of the economy. Recent studies have also directly assessed the roles of Islamic banks in financial and economic development (Gheeraert, 2014;Gheeraert and Weill, 2016;Imam and Kpodar, 2016;Lebdaoui and Wild, 2016). We add to this literature by bringing to the fore the issue of financial intermediation costs.…”

mentioning

confidence: 99%

Financial Intermediation Costs in a Dual Banking System: The Role of Islamic Banking

Ibrahim¹,

Siong²

2020

BEMP

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This paper empirically analyses the role of Islamic banking in financial intermediation costs as measured by net interest margins for a leading dual banking country, Malaysia. Controlling for theoretically motivated determinants of the margins, the paper compares the interest/financing margins of conventional and Islamic banks and examines the impacts of Islamic banking presence on bank margins. The analysis provides evidence of the higher margins of Islamic banks compared to those of conventional banks. Further, the difference in bank margins between the two types of banks can be attributed to differences in market power, operating costs, and diversification. Finally, Islamic banking presence or penetration, as represented by the ratio of Islamic financing to aggregate bank credit/financing and, alternatively, the share of Islamic banking assets, is robustly associated with lower bank margins, on average. These results bear important implications for the development of the Islamic banking industry and in fostering the efficient allocation of financial resources by the banking system.

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“…Gheeraert (2014) finds that Islamic banking contributes positively to banking sector development and exerts no crowding-out effect on conventional banking system. Lebdaoui & Wild (2016) further firms up the positive link between financial development and Islamic banking presence. Assessing Malaysian experience, Kassim (2016) documents positive effect of Islamic banking development on economic growth.…”

Section: Islamic Banking Presencementioning

confidence: 90%

“…Abedifar et al (2016) use the asset share of Islamic banks in their assessment of the roles of Islamic banks in funding mobilization, economic growth, inequality and poverty. Likewise, Lebdaoui & Wild (2016) use the asset share of Islamic banks in their analysis of financial development. Gheeraert (2014) and Imam & Kpodar (2014) employ three alternative measures of Islamic banking, the sizes of Islamic banking assets, financing and deposits relative to GDP.…”

Section: Methodsmentioning

confidence: 99%

Restructuring and Bank Performance in Dual Banking System

Sukmana

Ibrahim

2021

Signifikan

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While extensive study deals with bank competition and performance relationship, this study pioneers in focusing the existence Islamic bank in the presence of well established conventional banking system in Malaysia. This paper assesses the impact of changing competition landscape and Islamic bank penetration on bank risk, profitability and capitalization. This study utilizes an unbalanced panel dataset consisting of 37 commercial banks over the period 1997 to 2015. the paper uses a panel VAR methodology to discern the interactions between bank competition and Islamic banking presence on one hand and bank performance on the other hand.Findings: We find evidence supportive of both competition – stability and competition – fragility views for conventional banks. The results suggest that bank competition improves conventional bank risk and, at the same time, lower profitability and capital holdings. As for Islamic banks, competition seems to robustly influence only bank profitability. Finally, we note that increasing Islamic bank penetration improves the risk profile of conventional banks and, as expected, reduces their market power. These results bear important implications on the design of competition policies in a dual banking system as well as on the development of the Islamic banking sector.JEL Classification: C23, G21, G28How to Cite:Sukmana, R., & Ibrahim, M. H.. (2021). Restructuring and Bank Performance in Dual Banking System. Signifikan: Jurnal Ilmu Ekonomi, 10 (2), 223-247. https://doi.org/10.15408/sjie.v10i2.20740.

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Islamic Banking and Financial Development

Cited by 9 publications

References 22 publications

Exploring asymmetric relationship between Islamic banking development and economic growth in Pakistan: Fresh evidence from a non‐linear ARDL approach

Exploring asymmetric relationship between Islamic banking development and economic growth in Pakistan: Fresh evidence from a non‐linear ARDL approach

Financial Intermediation Costs in a Dual Banking System: The Role of Islamic Banking

Restructuring and Bank Performance in Dual Banking System

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