A value-based measure of market power for the participatory deposits of Islamic banks

Baldwin, K. ORCID: 0000-0003-0606-5553 and Alhalboni, M., 2023. A value-based measure of market power for the participatory deposits of Islamic banks. Journal of International Financial Markets, Institutions and Money: 101809. ISSN 1042-4431

[img]
Preview
Text
1786318_Baldwin.pdf - Post-print

Download (951kB) | Preview

Abstract

Traditional earnings-based measures of market power cannot be applied to Islamic banks since depositors are investors and not creditors. We develop a new market power measure based on the capitalised value of a bank’s deposit funds’ management fees in which more powerful banks price deposits to create greater long-term value, whilst less powerful banks target short-term earnings or risk management goals. Applying panel VAR and two-step system GMM to international data from 1990-2022, we validate the measure by showing that deposit growth rates (Granger) cause market power and are the only significant determinant across all two-step system GMM model and sub-sample variants.

Item Type: Journal article
Publication Title: Journal of International Financial Markets, Institutions and Money
Creators: Baldwin, K. and Alhalboni, M.
Publisher: Elsevier
Date: 29 July 2023
ISSN: 1042-4431
Identifiers:
NumberType
10.1016/j.intfin.2023.101809DOI
1786318Other
Divisions: Schools > Nottingham Business School
Record created by: Laura Ward
Date Added: 03 Aug 2023 08:23
Last Modified: 29 Jul 2024 03:00
URI: https://irep.ntu.ac.uk/id/eprint/49491

Actions (login required)

Edit View Edit View

Views

Views per month over past year

Downloads

Downloads per month over past year