Mofid University The Journal of Economic Studies and Policies 2423-4648 2 1 2015 08 23 Analysis of Competitive Condition and Testing the Effect of Islamic and Conventional Banking Market Structure on the Amount of Profitability Analysis of Competitive Condition and Testing the Effect of Islamic and Conventional Banking Market Structure on the Amount of Profitability 25 50 26387 FA Mohammad Naqi Nazarpour Associate Professor, Faculty of Economics and Political Science, Mofid University Amirhossein Najafzadeh PhD student in the Faculty of Economics and Political Science of Mofid University Saeedeh Hooshmand PhD student in the Faculty of Economics and Political Science of Mofid University Journal Article 2017 07 12 Islamic banks’ better performance in dealing with the recent global crisis has paid much attention to the way that banks’ mechanism works. The present study examines the following hypotheses by employing the PR-H statistics, Lerner index and Multivariate analysis. First, players of Islamic banking industry, by more market power, have better profitability and, in terms of market structure, have low competition. Second, Islamic banking market, by having a low competitive environment, is more concentrated and has a higher risk. Estimates show that Islamic banks have a higher degree of market power. Furthermore, multivariate analyses suggest that profitability increases significantly with increasing the market power. Islamic banking market shows less competition and more concentration. According to the results, Islamic banks allocate a greater share of their assets to finance and also have a more efficient allocation of capital. Islamic banks’ better performance in dealing with the recent global crisis has paid much attention to the way that banks’ mechanism works. The present study examines the following hypotheses by employing the PR-H statistics, Lerner index and Multivariate analysis. First, players of Islamic banking industry, by more market power, have better profitability and, in terms of market structure, have low competition. Second, Islamic banking market, by having a low competitive environment, is more concentrated and has a higher risk. Estimates show that Islamic banks have a higher degree of market power. Furthermore, multivariate analyses suggest that profitability increases significantly with increasing the market power. Islamic banking market shows less competition and more concentration. According to the results, Islamic banks allocate a greater share of their assets to finance and also have a more efficient allocation of capital. https://economic.mofidu.ac.ir/article_26387_4b0c6b58fb9b42eaace2cb27c73343db.pdf