Macroeconomic’s effect on Islamic and conventional banking profitability: Evidence from Indonesian dual-banking system

Achmad Fadlil Abidillah (), Roisatun Kasanah () and Sulistya Rusgianto ()

Jurnal Ekonomi & Keuangan Islam, 2022, vol. 8, issue 1, 1-16

Abstract: Purpose – This paper aims to analyze the effect of macroeconomic and global crisis variables on Islamic and conventional banking profitability, evidence from Indonesian dual-banking system.Methodology – Time-series data from 2008q1–2021q2 were analyzed using an Autoregressive Distributed Lag (ARDL) model. This method can describe both long run and short run equilibrium between banking profitability and macroeconomic variables.Findings – The results point out that in a long run model, sharia banking's profitability is more resistant to macroeconomics shock than conventional's. Then, in a short run model, sharia's ROA and conventional's ROA face different effects of economic growth, exchange rate, and global crisis. Sharia's NPM is more affected by macroeconomic variables than conventional's.Originality – This study used an ARDL model to develop a dynamic relation between macroeconomic variables and dual bankings profitability.

Keywords: Sharia Banking; Conventional Banking; Profitability; Macroeconomics; Global Crisis (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journal.uii.ac.id/JEKI/article/view/21996/12193 (application/pdf)

Related works:
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:uii:jekife:v:8:y:2022:i:1:p:1-16:id:21996

Access Statistics for this article

Jurnal Ekonomi & Keuangan Islam is currently edited by Ana Yuliani

More articles in Jurnal Ekonomi & Keuangan Islam from Faculty of Economics, Universitas Islam Indonesia
Bibliographic data for series maintained by Ana Yuliani ().