Spin-off, market structure, and deposit funds: case in the Indonesian Islamic banking industry

Mohammad Nur Rianto Al Arif

Abstract

The regulator had imposed some Islamic business units to do the spin-off after the enactment of the Islamic banking act (The Act No. 21 of 2008). The aim of this research is going to examine the relationship between spin-off, market structure, and deposit funds. Regression with panel data was using as a tools of analysis. The result shows that there is a difference in deposit funds between the spin-off banks and non-spin-off banks. Besides that, the result also indicates that there is a relationship between spin-off, market structure, and deposit funds in the Indonesian Islamic banking industry. The result implies that the regulator should a policy to accelerate the Indonesian Islamic banking industry.

Keywords

spin-off; market structure; deposit funds; Islamic banks

Full Text:

PDF

References

Ahamed, MD. M. 2012. Market Structure and Performance of Bangladesh Banking Industry: A Panel Data Analysis. Bangladesh Development Studies. XXXV (3): 1-18.

Ahmed, F., A. Ahmed., and S. Kanwal. 2018. Mergers and Acquisition in Selected Frontier Markets of Asia. Signifikan: Jurnal Ilmu Ekonomi. 7(1): 123-136. doi: https://doi.org/10.15408/sjie.v7i1.6074.

Ajide, F.M. and J.O. Ajileye. 2015. Market Concentraton and Profitability in Nigerian Banking Industry: Evidence from Error Correction Modeling. International Journal of Economics, Commerce, and Management. III (1): 1-12.

Al Arif, M.N.R. 2014. Spin-offs and Its Impact on Third Party Funds in Indonesian Islamic Banking Industry. Economic Journal of Emerging Markets. 6 (1): 50-55

Al Arif, M.N.R. 2015. Keterkaitan Kebijakan Pemisahan Terhadap Tingkat Efisiensi Pada Industri Perbankan Syariah di Indonesia (The Relationship Between Spin-Off Policy and Efficieny in The Indonesian Islamic banking industry). Jurnal Keuangan dan Perbankan. 19 (2): 295-304.

Al Arif, M.N.R., Nachrowi, N.D., Nasution, M.E., & Mahmud, T.M.Z. 2017. The Islamic Banking Spin-off: Lessons from Indonesian Islamic Banking Experiences. JKAU: Islamic Economics. 30 (2): 117-133. DOI: 10.4197/Islec.30-2.11.

Al Arif, M.N.R., I. Haribowo., and A. Suherlan. 2018. Spin-Off Policy and Efficiency in The Indonesian Islamic Banking Industry. Banks and Bank System. 13(1): 1-10.

Ascarya., & Yumanita, D. 2008. Comparing The Efficiency of Islamic Banks in Malaysia and Indonesia. Buleting Ekonomi Moneter dan Perbankan. 11(2): 95-120.

Ayadi, I. and A. Ellouze. 2013. Market Structure and Performance of Tunisian Banks. International Journal of Economics and Financial Issues. 3 (2): 345-354.

Bello, M. and W.A. Isola. (2014). Empirical Analysis of Structure-Conduct-Performance Paradigm on Nigerian Banking Industry. The Empirical Econometrics and Quantitative Economics Letter. 3 (3): 24-34.

Berger, A.N. 1995. The Profit Structure Relationship in Banking –Tests of Market-Power and Efficient-Structure Hypotheses. Journal of Money, Credit, and Banking. 27 (2): 404-431.

Berger A.N. and T.H. Hannan. 1998. The Efficiency Cost of Market Power in The Banking Industry: A Test of The “Quiet Life†and Related Hypotheses. The Review of Economics and Statistics. 80(3): 454-465.

Cupian., and M. Abduh. 2017. Competitive Condition and Market Power of Islamic Banks in Indonesia. International Journal of Islamic and Middle Eastern Finance and Management. 10 (1): 77-91. doi: https://doi.org/10.1108/IMEFM-09-2015-0098.

Fu, W., and S. Heffernan. (2009). The Effects of Reform on China’s Bank Structure and Performance. Journal of Banking and Finance. 33: 39-52.

Gilbert, A. 1984. Studies of Bank Market Structure and Competition: A Review and Evaluation. Journal of Money, Credit and Banking. 16: 617-644.

Goldberg, L.G., and A. Rai. 1996. The Structure-Performance Relationship for European Banking. Journal of Banking and Finance. 20: 745-771.

Hamid, A. 2015. The Impact of Spin-off Policy to The Profitability on Indonesian Islamic Banking Industry. Al-Iqtishad: Journal of Islamic Economics. 7 (1): 117-126.

Hamza, H., and S. Kachtouli. 2014. Competitive Conditions and Market Power of Islamic and Conventional Commercial Banks. Journal of Islamic Accounting and Business Research. 5 (1): 29-46. doi: https://doi.org/10.1108/JIABR-05-2012-0030.

Haribowo, I. 2017. The Indonesian Islamic Bank’s Spin-off: A Study in Regional Development Banks. Al-Iqtishad: Journal of Islamic Economics. 9 (1): 53-68.

Hosen, M.N. and R. Rahmawati. 2016. Efficiency and Profitability on Indonesian Islamic Banking Industry. Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics). 8 (1): 33-48. doi: 10.15408/aiq.v8i1.2507.

Louati, S., and Y. Boujelbene. (2015). Banks Stability-Efficiency Within Dual Banking System: A Stochastic Frontier Analysis. International Journal of Islamic and Middle Eastern Finance and Management. 8 (4): 472-490. doi: https://doi.org/10.1108/IMEFM-12-2014-0121.

Martin, S. 1992. Industrial Economics. New Jersey: Prentice Hall.

Miftah, K. and H. Wibowo. 2017. Merger and Industrial Acceleration: Study at Indonesian Islamic Banking Industry. Signifikan: Jurnal Ilmu Ekonomi. 6 (1): 29-48.

Nasuha, A. 2012. Dampak Kebijakan Spin-Off Terhadap Kinerja Bank Syariah (The Impact of Spin-off Policy on Islamic Bank Performance). Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics). 4 (2): 241-258.

Novarini. 2009. Efisiensi pada Unit Usaha Syariah Menggunakan SFA: Pada Fungsi Keuntungan dan BOPO (The Efficiency of Islamic Business Unit using SFA: Profit Function and BOPO Derivation). (Unpublished Thesis). Depok: Universitas Indonesia.

Poerwokoesoemo, A. 2016. Kinerja Bank Konvensional Pasca Spin-Off Unit Usaha Syariah (The Performance of Conventional Banks After The Islamic Business Unit’s Spin-off). Jurnal Keuangan dan Perbankan. 12 (2): 145-164.

Pramuka, B.A. 2011. Assesing Profit Efficiency of Islamic Banks in Indonesia: An Intermediation Approach. Journal of Economics, Business and Accountancy Ventura. 14 (1): 79-88

Rahim, R.A. 2016. Does Competition Foster Efficiency? Empirical Evidence From Malaysian Commercial Banks. Asian Academy of Management Journal of Accounting and Finance. 12(1): 1-23.

Ramdani, A. 2015. Pengaruh Kebijakan Pemisahan Terhadap Laba Pada Bank BNI Syariah (The Impact of Spin-off Policy on Profitability at Bank of BNI Sharia). Etikonomi. 14 (1): 17-34.

Rashid, A., S. Yousaf., and M. Khaleequzzaman. (2017). Does Islamic Banking Really Strengthen Financial Stability? Empirical Evidence from Pakistan. International Journal of Islamic and Middle Eastern Finance and Management. 10 (2): 130-148. doi: https://doi.org/10.1108/IMEFM-11-2015-0137.

Samad, A. 2008. Market Structure, Conduct and Performance: Evidence from the Bangladesh Banking Industry. Journal of Asian Economics. 19: 181-193.

Schaeck, K., M. Cihak., and S. Wolfe. (2009). Are Competitive Banking Systems More Stable. Journal of Money, Credit and Banking. 41 (4): 711-734.

Scott, J.A., and W.C. Dunkelberg. 2010. Competition for Small Firm Banking Business. Bank Actions versus Market Structure. Journal of Banking and Finance. 34: 2788-2800. doi: https://doi.org/10.1016/j.bankfin.2010.06.004.

Shaffer, S. 2004. Patterns of Competition in Banking. Journal of Economics and Business. 56: 287-313.

Sufian, F., and M.S. Habibullah. 2012. Globalization and Bank Performance in China. Research in International Business and Finance. 26: 221-239. doi: https://doi.org/10.1016/j.ribaf.2011.12.005.

Tajgardoon, G., M. Behname., and K. Noormodamadi. 2012. Is Profitability as a Result of Market Power or Efficiency in Islamic Banking Industry? Economics and Finance Review. 2 (5): 1-7.

Tan, Y., and C. Floros. 2012. Bank Profitability and Inflation: The Case of China. Journal of Economic Studies. 39 (6): 675-696. doi: https://doi.org/10.1108/01443581211274610.

Yudaruddin, R. 2015. Market Structure, Conduct, and Performance: Evidence From Indonesian Banking Industry. Ekuitas: Jurnal Ekonomi dan Keuangan. 19 (3): 299-317.

Zhang, J., C. Jiang., B. Qu., and P. Wang. 2013. Market Concentration, Risk-Taking, and Bank Performance: Evidence from Emerging Economies. International Review of Financial Analysis. 30: 149-157.

Zhao, T., B. Casu., and A. Ferrari. 2010. The Impact of Regulatory Reforms on Cost Structure, Ownership, and Competition in Indian Banking. Journal of Banking and Finance. 34: 246-254.

Article Metrics

Metrics Loading ...

Metrics powered by PLOS ALM




Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Economic Journal of Emerging Markets (EJEM) is accredited by the Ministry of Research, Technology and Higher Education of the Republic of Indonesia (RISTEKDIKTI), No. 30/E/KPT/2018. It is currently indexed in:

Emerging Source Citation Index Clarivate AnalyticsREPEC (Econpapers)EBSCO, ProQuestDirectory of Open Access Journals (DOAJ)Cite FactorSinta (Science and Technology Index)IPI (Indonesian Publication Index)OCEC WorldCatHarvard LibraryThe Univesity of ManchesterUniversity of OxfordGoogle ScholarAsean Citation IndexDimensions - Digital Science

  Harvard Library   Google Scholar     Indonesian Publication Index (IPI)   WorldCat  Harvard Library  University of Oxford    

 
 Creative Commons License
Economic Journal of Emerging Markets by http://journal.uii.ac.id/JEP/ is licensed under a Creative Commons Attribution 4.0 International License.