| Summary: | This study aims to analyze the Indonesian Islamic banking in 2010-2013
using Structure-Conduct-Performance and Relative Efficiency approach. To see
the impact of market structure on the performance of Indonesian Islamic banking
industry, this study uses a model of Michael Smirlock that has been modified and
adjusted with other variables. In the study we used a panel data analysis with a
cross section of 10 from 11 Indonesian Islamic banks and time series data from
2010 Q2 to 2013 Q3. The estimation results indicate that this study does not
support the SCP hypothesis with the finding of a negative and significant effect
between market concentration (CR) against profitability (ROE). This proves that
the Indonesian Islamic banking industry is not concentrated in the two largest
banks. Meanwhile , the market share (MS) has a positive and significant effect on
profitability (ROE) as a proxy for performance. This indicates that the Indonesian
Islamic banking industry supports the Relative Efficiency hypothesis. Positive
coefficient shows that the market share of Indonesian Islamic banks run
efficiently. There is a negative and significant effect between NIM and ROA with
ROE also positive but not significant effect between GDPK the ROEvariables.
Keyword: SCP theory, relative efficiency theory, panel data, islamic banking,
profitability.
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