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Market Structure and Competition in Emerging Market: Evidence from Malaysian Islamic Banking Industry

Author

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  • Abdul Majid, Muhamed Zulkhibri
  • Sufian, Fadzlan

Abstract

This paper investigates the market structure of Islamic banking industry in Malaysia during 2001-2005 and evaluates the degree of competition using the H-statistic by Panzar and Rosse (1987). The estimated H-statistics for the whole sample periods are positive ranging from 0.38 to 0.62 and the Wald test for the market structure of monopoly or perfect competition is rejected implying that the Islamic banks in Malaysia earned their revenue in the condition of monopolistic competition.

Suggested Citation

  • Abdul Majid, Muhamed Zulkhibri & Sufian, Fadzlan, 2007. "Market Structure and Competition in Emerging Market: Evidence from Malaysian Islamic Banking Industry," MPRA Paper 12126, University Library of Munich, Germany, revised 01 Jul 2007.
  • Handle: RePEc:pra:mprapa:12126
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    File URL: https://mpra.ub.uni-muenchen.de/12126/1/MPRA_paper_12126.pdf
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    References listed on IDEAS

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    Cited by:

    1. Iqbal J. Permana & Bernadette Robiani & Taufiq Marwa & Azwardi, 2017. "An Analysis Of Structure, Behavior And Banking Performance Of Islamic Banking In Indonesia," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 5(1), pages 114-127.
    2. Ariss, Rima Turk, 2010. "Competitive conditions in Islamic and conventional banking: A global perspective," Review of Financial Economics, Elsevier, vol. 19(3), pages 101-108, August.
    3. Memić Deni, 2015. "Banking Competition and Efficiency: Empirical Analysis on the Bosnia and Herzegovina Using Panzar-Rosse Model," Business Systems Research, De Gruyter Open, vol. 6(1), pages 72-92, March.
    4. Jean-Michel Sahut & Mehdi Mili & Maroua Ben Krir & Frédéric Teulon, 2015. "Factors of Competitiveness of Islamic Banks in the New Financial Order," Working Papers 2015-625, Department of Research, Ipag Business School.
    5. repec:kap:ecopln:v:51:y:2018:i:1:d:10.1007_s10644-016-9200-3 is not listed on IDEAS

    More about this item

    Keywords

    Competition; Panzar-Rosse model; Islamic Bank; Malaysia; Market structure;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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