Examining profit-sharing financing dynamics in Indonesian Islamic banking: ECM and ARDL approaches
Purpose – This study examines the key factors driving profit-sharing financing growth in Indonesian Islamic banks and offers insights into post-Covid-19 recovery strategies. Methodology – This study used the ECM and ARDL methods to analyze short-term adjustments and long-term dynamics in 35 Indones...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Center for Islamic Economics Studies and Development
2025-08-01
|
| Series: | Jurnal Ekonomi dan Keuangan Islam |
| Subjects: | |
| Online Access: | https://journal.uii.ac.id/JEKI/article/view/38399 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1850035804536045568 |
|---|---|
| author | Sandi Sandia Ascarya Ascarya Sulaeman Sulaeman |
| author_facet | Sandi Sandia Ascarya Ascarya Sulaeman Sulaeman |
| author_sort | Sandi Sandia |
| collection | DOAJ |
| description |
Purpose – This study examines the key factors driving profit-sharing financing growth in Indonesian Islamic banks and offers insights into post-Covid-19 recovery strategies.
Methodology – This study used the ECM and ARDL methods to analyze short-term adjustments and long-term dynamics in 35 Indonesian Islamic banks.
Findings – The results indicate that money supply, liquidity ratio, and financial profitability drive both short- and long-term growth in profit-sharing financing. Conversely, inflation and financial risk negatively affect the long-term expansion of such financing. Meanwhile, exchange rates, interest rates, and operational efficiency do not have a significant influence. Additionally, the findings highlight that long-term relationships in profit-sharing financing remain stable, with temporary short-term imbalances.
Implications – This study provides evidence for policymakers and Islamic bank management to develop strategies to enhance profit-sharing financing, support Islamic banking growth, and guide post-Covid-19 recovery policies. Insights highlight key areas for strengthening Islamic banking operations in Indonesia.
Originality – This study builds on previous research by applying the ECM and ARDL frameworks, providing a more comprehensive analysis of profit-sharing financing determinants in Indonesian Islamic banking.
|
| format | Article |
| id | doaj-art-5920ff313dff4d13aaa51c3e4cd61c13 |
| institution | DOAJ |
| issn | 2088-9968 2614-6908 |
| language | English |
| publishDate | 2025-08-01 |
| publisher | Center for Islamic Economics Studies and Development |
| record_format | Article |
| series | Jurnal Ekonomi dan Keuangan Islam |
| spelling | doaj-art-5920ff313dff4d13aaa51c3e4cd61c132025-08-20T02:57:22ZengCenter for Islamic Economics Studies and DevelopmentJurnal Ekonomi dan Keuangan Islam2088-99682614-69082025-08-0111210.20885/JEKI.vol11.iss2.art4Examining profit-sharing financing dynamics in Indonesian Islamic banking: ECM and ARDL approachesSandi Sandia0Ascarya Ascarya 1Sulaeman Sulaeman2Master of Islamic Economics, Faculty of Islamic Economics and Business, Tazkia University, Bogor, IndonesiaLecturer of Islamic Economics Study Program, Faculty of Islamic Economics and Business, Tazkia University, Bogor, IndonesiaDepartment of Islamic Economics, Faculty of Economics and Business, Universitas Airlangga, Indonesia and Senior Resercher, R-Square Research Consulting, Bogor, Indonesia Purpose – This study examines the key factors driving profit-sharing financing growth in Indonesian Islamic banks and offers insights into post-Covid-19 recovery strategies. Methodology – This study used the ECM and ARDL methods to analyze short-term adjustments and long-term dynamics in 35 Indonesian Islamic banks. Findings – The results indicate that money supply, liquidity ratio, and financial profitability drive both short- and long-term growth in profit-sharing financing. Conversely, inflation and financial risk negatively affect the long-term expansion of such financing. Meanwhile, exchange rates, interest rates, and operational efficiency do not have a significant influence. Additionally, the findings highlight that long-term relationships in profit-sharing financing remain stable, with temporary short-term imbalances. Implications – This study provides evidence for policymakers and Islamic bank management to develop strategies to enhance profit-sharing financing, support Islamic banking growth, and guide post-Covid-19 recovery policies. Insights highlight key areas for strengthening Islamic banking operations in Indonesia. Originality – This study builds on previous research by applying the ECM and ARDL frameworks, providing a more comprehensive analysis of profit-sharing financing determinants in Indonesian Islamic banking. https://journal.uii.ac.id/JEKI/article/view/38399Profit-sharing financingIslamic Bankingbanking policyCOVID-19 crisisIndonesia |
| spellingShingle | Sandi Sandia Ascarya Ascarya Sulaeman Sulaeman Examining profit-sharing financing dynamics in Indonesian Islamic banking: ECM and ARDL approaches Jurnal Ekonomi dan Keuangan Islam Profit-sharing financing Islamic Banking banking policy COVID-19 crisis Indonesia |
| title | Examining profit-sharing financing dynamics in Indonesian Islamic banking: ECM and ARDL approaches |
| title_full | Examining profit-sharing financing dynamics in Indonesian Islamic banking: ECM and ARDL approaches |
| title_fullStr | Examining profit-sharing financing dynamics in Indonesian Islamic banking: ECM and ARDL approaches |
| title_full_unstemmed | Examining profit-sharing financing dynamics in Indonesian Islamic banking: ECM and ARDL approaches |
| title_short | Examining profit-sharing financing dynamics in Indonesian Islamic banking: ECM and ARDL approaches |
| title_sort | examining profit sharing financing dynamics in indonesian islamic banking ecm and ardl approaches |
| topic | Profit-sharing financing Islamic Banking banking policy COVID-19 crisis Indonesia |
| url | https://journal.uii.ac.id/JEKI/article/view/38399 |
| work_keys_str_mv | AT sandisandia examiningprofitsharingfinancingdynamicsinindonesianislamicbankingecmandardlapproaches AT ascaryaascarya examiningprofitsharingfinancingdynamicsinindonesianislamicbankingecmandardlapproaches AT sulaemansulaeman examiningprofitsharingfinancingdynamicsinindonesianislamicbankingecmandardlapproaches |