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Measurement of Competitiveness and Market Concentration of Indonesian Banking Sharia

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  • , Paulina

Abstract

This study aims: (1) The extent of competitiveness of sharia banking in Indonesia's current economic development; (2) How far the strength of the sharia banking market in Indonesia today. The research conducted to measure the competitiveness of sharia banking in Indonesia and market forces encountered, using the observation period 2010-2016, and the data used is time series and cross section data. The research design used in research is quantitative research, by using model Lerner Index, PR-H Statistics Model, and multiple regression. Based on the results of the study, 1. Using the Lerner index model, for 10 Indonesian sharia banks, especially murabahah products with observation period 2010 - 2016, shows that the competitiveness of Indonesian sharia banks is still very low. The Lerner index for each sharia banks with competitiveness of murabahah products is Bank Mega Sharia, Bank BRI Sharia, Maybank and BSM. As for other sharia banks is still very low; 2. The measurement of market forces using the PR-H Statistics model, murabahah products of Indonesian sharia banks during 2010-2016 fall into the category of the monopolistic competition market. This indicates that, the murabahah product of each sharia banks is basically almost the same, only slightly differentiated by the deficited products in such a way between one bank and another bank; 3. Regression result model of factors affecting competitiveness, only ROA variable that influence to competitiveness, it shows that ROE variable, capitalization and efficiency not become determinant of competitiveness of a bank, especially for murabahah product.

Suggested Citation

  • , Paulina, 2021. "Measurement of Competitiveness and Market Concentration of Indonesian Banking Sharia," OSF Preprints nhq8y, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:nhq8y
    DOI: 10.31219/osf.io/nhq8y
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    References listed on IDEAS

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    1. Rima Turk Ariss, 2010. "Competitive conditions in Islamic and conventional banking: A global perspective," Review of Financial Economics, John Wiley & Sons, vol. 19(3), pages 101-108, August.
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