Islamic bank margins in Indonesia: The role of market power and bank-specific variables

Our study examines the determinants of bank margins in Indonesian Islamic banks. The consist market-and-bank-specific variables. We investigate 31 banks, using quarterly data from 2015: Q1 to 2020: Q4. Panel regression with unbalanced is employed. findings indicate that higher are positively linked banks market power. Bank high risk-sharing financing has low margins. Bank-specific variables such as income diversification, risk-averse, financing, and risk influence This also documents effect power on more pronounced subsidiaries, lower through prominent subsidiaries. These results suggest important policy implications should focus a core business because it can reduce price products well their intermediation costs.