Determinant factors of market share: evidence from the Indonesian Islamic banking industry

  • Received October 26, 2017;
    Accepted February 28, 2018;
    Published March 28, 2018
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  • Article Info
    Volume 16 2018, Issue #1, pp. 392-398
  • Cited by
    6 articles

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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Market share is one of the performance indicators for the Islamic banking industry in Indonesia. Actually, the policy makers had set up the 5% market share to be achieved in 2008. Unfortunately, this target finally was met at the end of 2016. This study is going to examine the determinants of market share in the Indonesian Islamic banking industry. From the empirical result, we can see that some of the variables had an impact on market share. The variables impacting market share are the default rate, operational efficiency rate, the yield of profit sharing, and conventional bank’s interest rate. The other variables such as profitability ratio and liquidity ratio don’t have an impact on market share. The result implies that Islamic banks should strengthen the internal factors to accelerate their growth and performance.

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    • Table 1. The number of Islamic banks in Indonesia
    • Table 2. The Islamic banking market share development
    • Table 3. Estimation result