Government policy response to COVID-19 and bank performance: a comparison between Islamic and conventional banks

Rizky Yudaruddin

Journal of Islamic Accounting and Business Research, 2023, vol. 14, issue 6, 952-972

Abstract: Purpose - This study aims to examine the joint impact of the COVID-19 pandemic and the government response on the performance of Islamic and conventional banks. Design/methodology/approach - Data were collected from a sample of 94 conventional and 14 Islamic banks in Indonesia from March 2020 to September 2021. The system generalized methods of moments estimation is used to analyze the data. Findings - This study finds robust results regarding the negative impact of the COVID-19 pandemic and the positive effects of government responses to COVID-19 pandemic on bank performance in Indonesian banking. Moreover, in line with the rise in confirmed COVID-19 cases, a higher government policy responses index improves bank performance, both in conventional and Islamic banks. Practical implications - This paper highlights the importance of the government policy responses index to absorb the negative impact of the COVID-19 outbreak on banking performance. Originality/value - This paper provides novel insights into the joint impact of the COVID-19 pandemic and government responses to COVID-19 pandemic on bank performance between conventional and Islamic banks.

Keywords: COVID-19; Government policy responses; Bank performance; Islamic banks (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jiabrp:jiabr-09-2022-0248

DOI: 10.1108/JIABR-09-2022-0248

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