Analysis of The Impact of State Governance On the Stability of Islamic Bank Across 20 Countries

Abstract

The purpose of this research is to examine the stability of Islamic banks across 20 countries that are influenced by the role of their governance. This study uses unbalanced panel data and fixed effect model to operate the data. From this study, the researcher found that supportive country governance and efficient contract enforcement induce Islamic banking stability. Those country governance variables which support the positive effect on Islamic bank stability are control of corruption, political stability, and regulatory quality Keywords—Islamic bank, Country governance, bank stability, control of corruption, political stability, regulatory quality