I read a paper that claim shariah compliance of Islamic banks could influence the market share of the bank but I couldn't find yet another paper that prove that.
- first of all, this hypothesis you propose can only hold true in islamic country where there are more shariah banks than conventional banks. Therefore, your question.
- Market share is determined by bank size, loan to asset ratio, innovation, competition and strategy among banks.
- Even "regulatory compliance" itself is not a determinant of market share, therefore, i dont see how a case could be made for shariah compliance as a determinant of market share. What economic argument do you suggest could support your hypothesis?
Of course, yes. Compliance with Sharia will definitely influence the market share of banks. However, this impact would still depend on some other variables. Just as Prof. Ozili earlier stated the market share of banks could be determined by bank size, loan to asset ratio, innovation, competition and strategy management of such Islamic banks among other banks. Besides, the impact could be positive or negative. Yet, the magnitude of the impact varies too.
@Dr Adebanjo Falaye
Of course, yes. Compliance with Sharia will definitely influence the market share of banks. However, this impact would still depend on some other variables. Just as Prof. Ozili earlier stated the market share of banks could be determined by bank size, loan to asset ratio, innovation, competition and strategy management of such Islamic banks among other banks. Besides, the impact could be positive or negative. Yet, the magnitude of the impact varies too.