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Factors Affecting Mudaraba Deposits in Indonesia

Author

Listed:
  • Erna Rachmawati

    (Department of Economics, Padjadjaran University)

  • Ekki Syamsulhakim

    (Department of Economics, Padjadjaran University)

Abstract

The aim of this study is to figure out the factors affecting mudaraba deposits in Indonesia using a well known econometric’s cointegration method. It uses quarterly time series in the period of 1993 – 2003. Four variables, GDP, number of Islamic bank’s branch offices, profit sharing rate, and interest rate are thought to have influence on the volume of mudaraba deposits. The cointegration test indicates that the number of Islamic bank’s branch offices and profit sharing rate are significantly affects the volume of mudaraba deposits in Indonesia in the long run, while GDP and interest rate are not. It may be concluded that the volume of mudaraba deposits in Indonesia does not depend on income or interest rate, but depend on profit sharing rate and the number of branch offices of the Islamic commercial banks. This finding supported the view that depositors are attracted to put their money in Indonesian Islamic banks partly due to welfare maximisation reasons, not only because of their religious considerations. Moreover, in order to increase the volume of mudaraba deposits in Indonesia, it is suggested that more branch offices of Islamic commercial banks are built. Lastly, Indonesian Islamic commercial banks should also provide an optimal profit sharing rate in order to attract more depositors.

Suggested Citation

  • Erna Rachmawati & Ekki Syamsulhakim, 2004. "Factors Affecting Mudaraba Deposits in Indonesia," Working Papers in Economics and Development Studies (WoPEDS) 200404, Department of Economics, Padjadjaran University, revised Aug 2004.
    • Handle: RePEc:unp:wpaper:200404
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    File URL: http://ceds.feb.unpad.ac.id/wopeds/200404.pdf
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    References listed on IDEAS

    as
    1. Sudin Haron, 1998. "A Comparative Study of Islamic Banking Practices دراسة مقارنة للممارسات المصرفية الإسلامية," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 10(1), pages 23-50, January.
    2. Athukorala, Prema-chandra & Sen, Kunal, 2004. "The Determinants of Private Saving in India," World Development, Elsevier, vol. 32(3), pages 491-503, March.
    3. Haldrup, Niels, 1994. "The asymptotics of single-equation cointegration regressions with I(1) and I(2) variables," Journal of Econometrics, Elsevier, vol. 63(1), pages 153-181, July.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Dinc, Yusuf, 2017. "The Functioning and Accounting of Musharakah Financing in Participation Banks and Firms; Problems and Recommendations," MPRA Paper 85336, University Library of Munich, Germany.
    2. Sana Rhoudri & Lotfi Benazzou, 2021. "Predictive Factors of Withdrawal Behavior among Profit-Sharing Investment Depositors in Morocco: A Qualitative Study from the Perspective of Push-Pull-Mooring Framework," Post-Print hal-03328276, HAL.
    3. Kabir, Anis & Abdul Rehman Shah, Syed Muhammad & Hassan, M. Kabir & Akmal, Muhammad, 2022. "The Transmission Mechanism of Monetary Policy via Bank’ Balance Sheet: An Empirical Study of Dual Banking System in Pakistan," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 56(2), pages 129-140.
    4. Anass Mezine, 2024. "The Exposure of participative banks to changes in interest rates : Its emergence, impacts and potential measures to address them," Post-Print hal-04507593, HAL.
    5. Amjad Qwader & Ateyah Alawneh, 2017. "Measuring the Impact of Economic Stability and Remittances of Overseas Workers on Bank Deposits: the Case of Jordan," Accounting and Finance Research, Sciedu Press, vol. 6(2), pages 1-45, May.

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    More about this item

    Keywords

    Islamic Banking; Indonesia;

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General

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