Oil prices and Islamic banks performance in the OIC countries:  Evidence from the Dynamic GMM approaches

SUTAN EMIR HIDAYAT; Muhammad Rizky Prima Sakti

doi:https://doi.org/10.5281/zenodo.17119452

Oil prices and Islamic banks performance in the OIC countries: Evidence from the Dynamic GMM approaches

SUTAN EMIR HIDAYAT, Muhammad Rizky Prima Sakti

Abstract

This study uses an extensive data set consisting of 81 Islamic banks from Muslim countries with historical yearly data (2006 to 2015) and examines the extent to which the oil production can affecting the Islamic banks profitability in those countries. Using the Dynamic GMM model as a baseline results, we find that only 4.2% to 4.8% of the Islamic banking profitability react directly to the change in oil prices. However, we observe that 46% to 60% of the Islamic banks profitability react indirectly to the change in oil prices through the macroeconomic factors. The results pass several robustness tests.

Keywords:

GMM , Islamic Banks , Muslim Countries , Oil , Performance

Article Details

Year: 2020

Volume: 41

Issue: 2

Pages: 113 - 140

Accepted: 30.06.2020

DOI:
https://doi.org/10.5281/zenodo.17119452

Full Text (PDF)

2 Views 2 Downloads

How to Cite?

SUTAN EMIR HIDAYAT, Muhammad Rizky Prima Sakti (2020). Oil prices and Islamic banks performance in the OIC countries: Evidence from the Dynamic GMM approaches. Journal of Economic Cooperation and Development, 41(2), 113-140. https://doi.org/10.5281/zenodo.17119452