Competition in dual markets: Implications for banking system stability

Tastaftiyan Risfandy, Amine Tarazi and Irwan Trinugroho

Global Finance Journal, 2022, vol. 52, issue C

Abstract: This paper investigates whether Islamic and conventional banks' stability is differently impacted by competition in dual markets where the two bank types operate alongside each other. Using a sample of 123 Islamic and 647 conventional banks from 29 countries for a period between 2010 and 2018, we find robust evidence that competition erodes the stability of conventional banks only. The stability of Islamic banks is not impacted specifically where religion is more prevalent. Focusing more deeply on religiosity and the institutional environment, such as the ease of doing business and economic freedom, we also find that such factors matter in differently shaping the competition-fragility nexus for the two types of banks.

Keywords: Competition; Stability; Dual banking; Islamic banks; Z-score; Lerner index (search for similar items in EconPapers)
JEL-codes: D40 G21 G28 Z12 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1044028320302799
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Competition in dual markets: Implications for banking system stability (2022)
Working Paper: Competition in dual markets: Implications for banking system stability (2020)
Working Paper: Competition in dual markets: Implications for banking system stability (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:52:y:2022:i:c:s1044028320302799

DOI: 10.1016/j.gfj.2020.100579

Access Statistics for this article

Global Finance Journal is currently edited by Manuchehr Shahrokhi

More articles in Global Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().