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Market concentration of Malaysia's Islamic banking industry

The aim of this paper is to evaluate the nature and changes of market concentration in the Malaysia’s Islamic banking due to the restructuring of Islamic banking industry within the liberalization wave in the banking market. A total of 17 Islamic banks operating over the period of 2000-2010 had been...

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Main Authors: Mohammed, Nafisah, Ismail, Abdul Ghafar, Muhammad, Junaina, Abdul Jalil, Suhaila, Mohd Noor, Zaleha
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2015
Online Access:http://psasir.upm.edu.my/id/eprint/22576/1/Market%20concentration%20of%20Malaysia%27s%20Islamic%20banking%20industry.pdf
http://psasir.upm.edu.my/id/eprint/22576/
http://www.ukm.my/fep/jem/content/2015.html
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spelling my.upm.eprints.225762016-02-02T04:02:21Z http://psasir.upm.edu.my/id/eprint/22576/ Market concentration of Malaysia's Islamic banking industry Mohammed, Nafisah Ismail, Abdul Ghafar Muhammad, Junaina Abdul Jalil, Suhaila Mohd Noor, Zaleha The aim of this paper is to evaluate the nature and changes of market concentration in the Malaysia’s Islamic banking due to the restructuring of Islamic banking industry within the liberalization wave in the banking market. A total of 17 Islamic banks operating over the period of 2000-2010 had been considered. The structural approach framework was used to evaluate the nature and changes of market concentration in the Islamic banking industry in Malaysia. Under this approach, various market concentration indexes has been calculated from year to year basis as proposed by the industrial organizational field. Findings herein supported the structure-conduct-performance (SCP) paradigm where different concentration ratios have decreased over the study’s period where this is reflected in the greater degree of competition in the Malaysia’s Islamic banking industry. This study found an evidence that structural changes in the Islamic banking market has changed the market structure of the respective market from moderately concentrated to low concentrated market; whereby supporting the existence of competitive environment in the Malaysian Islamic banking market. Present study contributed to new knowledge in banking market concentration particularly for Islamic banking industry in the emerging economies such as Malaysia. Many past studies studying this issue had extensively examined the conventional banking system, but only several studies were on Islamic banking market. Hence, this study may enrich the existing literature on this issue, particularly for the Islamic banking industry. Policy recommendation from the findings; first, Malaysian Islamic banking industry needs a contestable market environment as to enable them to achieve better profit and efficient operation. Second, concentration ratios from this study can be used to identify the optimal number of banking firms in the Islamic banking industry. Penerbit Universiti Kebangsaan Malaysia 2015 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/22576/1/Market%20concentration%20of%20Malaysia%27s%20Islamic%20banking%20industry.pdf Mohammed, Nafisah and Ismail, Abdul Ghafar and Muhammad, Junaina and Abdul Jalil, Suhaila and Mohd Noor, Zaleha (2015) Market concentration of Malaysia's Islamic banking industry. Jurnal Ekonomi Malaysia, 49 (1). pp. 3-14. ISSN 0126-1962 http://www.ukm.my/fep/jem/content/2015.html
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description The aim of this paper is to evaluate the nature and changes of market concentration in the Malaysia’s Islamic banking due to the restructuring of Islamic banking industry within the liberalization wave in the banking market. A total of 17 Islamic banks operating over the period of 2000-2010 had been considered. The structural approach framework was used to evaluate the nature and changes of market concentration in the Islamic banking industry in Malaysia. Under this approach, various market concentration indexes has been calculated from year to year basis as proposed by the industrial organizational field. Findings herein supported the structure-conduct-performance (SCP) paradigm where different concentration ratios have decreased over the study’s period where this is reflected in the greater degree of competition in the Malaysia’s Islamic banking industry. This study found an evidence that structural changes in the Islamic banking market has changed the market structure of the respective market from moderately concentrated to low concentrated market; whereby supporting the existence of competitive environment in the Malaysian Islamic banking market. Present study contributed to new knowledge in banking market concentration particularly for Islamic banking industry in the emerging economies such as Malaysia. Many past studies studying this issue had extensively examined the conventional banking system, but only several studies were on Islamic banking market. Hence, this study may enrich the existing literature on this issue, particularly for the Islamic banking industry. Policy recommendation from the findings; first, Malaysian Islamic banking industry needs a contestable market environment as to enable them to achieve better profit and efficient operation. Second, concentration ratios from this study can be used to identify the optimal number of banking firms in the Islamic banking industry.
format Article
author Mohammed, Nafisah
Ismail, Abdul Ghafar
Muhammad, Junaina
Abdul Jalil, Suhaila
Mohd Noor, Zaleha
spellingShingle Mohammed, Nafisah
Ismail, Abdul Ghafar
Muhammad, Junaina
Abdul Jalil, Suhaila
Mohd Noor, Zaleha
Market concentration of Malaysia's Islamic banking industry
author_facet Mohammed, Nafisah
Ismail, Abdul Ghafar
Muhammad, Junaina
Abdul Jalil, Suhaila
Mohd Noor, Zaleha
author_sort Mohammed, Nafisah
title Market concentration of Malaysia's Islamic banking industry
title_short Market concentration of Malaysia's Islamic banking industry
title_full Market concentration of Malaysia's Islamic banking industry
title_fullStr Market concentration of Malaysia's Islamic banking industry
title_full_unstemmed Market concentration of Malaysia's Islamic banking industry
title_sort market concentration of malaysia's islamic banking industry
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2015
url http://psasir.upm.edu.my/id/eprint/22576/1/Market%20concentration%20of%20Malaysia%27s%20Islamic%20banking%20industry.pdf
http://psasir.upm.edu.my/id/eprint/22576/
http://www.ukm.my/fep/jem/content/2015.html
_version_ 1643827860962541568
score 13.211869

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