Narrow Results

We use a monthly dataset to analyze whether Islamic banks have greater market power compared with their conventional counterparts. Using a sample of Indonesian banks, we find that Islamic banks possess greater market power than conventional banks. This condition does not hold, however, when we compare state-owned Islamic and conventional banks. We also find some specific determinants of Islamic banks’ market power: the Ramadan holy month (positive impact), the proportion of profit-and-loss sharing in their financing (negative impact), and the presence of a Sharia board (positive impact). Interestingly, Ramadan benefits not only Islamic banks but also conventional banks. Our findings support prior literature emphasizing the role of religiosity in Islamic banks’ behavior.

This paper examines whether religious practices nudge people to donate. We carried out our study by focusing on the month of Ramadan, which is considered a sacred month by Muslims around the world. The results show that Ramadan has a significant effect on the amount of donations. Moreover, those who observe Ramadan have significantly increased their probability of donating and the amount of donation in Ramadan.