Dual Market Competition and Deposit Rate Setting in Islamic and Conventional Banks

Céline Meslier-Crouzille (celine.meslier@unilim.fr), Tastaftiyan Risfandy (tastaftiyan.risfandy@staff.uns.ac.id) and Amine Tarazi
Additional contact information
Céline Meslier-Crouzille: LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges
Tastaftiyan Risfandy: LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges
Authors registered in the RePEc Author Service: Celine Meslier Crouzille (celine.meslier@unilim.fr)

Post-Print from HAL

Abstract: This paper addresses the issue of competition in dual banking markets by analyzing the determinants of deposit rates in Islamic and conventional banks. Using a sample of 20 countries with dual banking systems over the 2000-2014 period, our results show significant differences in the drivers of Islamic and conventional banks' pricing behavior. Conventional banks with stronger market power set lower deposit rates but market power is not significant for Islamic banks. In predominantly Muslim environments, conventional banks set higher deposit rates and further higher when their market power is lower. Whereas conventional banks are influenced by the competitiveness of Islamic banks, Islamic banks are only affected by their peers in predominantly Muslim countries. Our findings have important implications regarding competition and bank stability in dual banking markets.

Keywords: deposit rate; competition; dual banking market; Islamic and conventional banks (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (30)

Published in Economic Modelling, 2017, pp.Forthcoming. ⟨10.2139/ssrn.2811691⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Dual market competition and deposit rate setting in Islamic and conventional banks (2017)
Working Paper: Dual Market Competition and Deposit Rate Setting in Islamic and Conventional Banks (2016)
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:hal:journl:hal-01471747

DOI: 10.2139/ssrn.2811691

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD (hal@ccsd.cnrs.fr).