Macroeconomic Determinants of Islamic Banking Products in Indonesia
Round 1
Reviewer 1 Report
The Abstract clearly presents the purpose of the paper and the methodological instruments used (Gregory Hansen cointegration, Granger causality, and impulse response function).
The Introduction should refer to the macroeconomic determination and particularities of banking in Indonesia and contains less literature review. (some of lines 37-62 could be moved to a new section Literature Review).
A new section called Literature Review could be added and improved (some basis are present in the paper at lines 37-62).
The Methodology regarding Unit Root Test and Gregory and Hansen Cointegration Test is satisfactorily presented.
There is no Descriptive Statistics about the data. Descriptive statistics should be inserted (possibly starting from line 142). There is also a need to compare the data used in the paper with other samples from different studies.
The tests for stationarity (Unit Root tests) are present in the paper and well explained.
The interactions, causality and impulse responses are thoroughly presented in the article. The tests and impulse response are normally used as premises to further analysis such as econometric models.
An econometric model that should analyze the variable interactions is needed (probably an ARDL or VECM one).
The conclusions are quite narrow. It should be improved by taking into considerations the limitations of the study, results in line with other studies and future / further analysis.
The references are insufficient regarding the number of analyzed papers (only 34) and could be extended if Literature Review is added to the article.
Author Response
Dear Editors and anonymous referees,
We are more grateful for the letter dated April 23, 2019, which kindly provides us with the opportunity to revise our paper for Economies. It has been thoroughly revised following the helpful and constructive comments made by the Editor-in-chief and the anonymous referees. We highlighted the changes to our manuscript in red-colored text and believed that we have successfully addressed all the suggestions. The following are the summary of our responses to the referees’ comments.
1. We rewrote the introduction part and added some information about Islamic banking in Indonesia, macroeconomic determination on banking and moved some literature review into the next section.
2. New section of literature review has been added to the paper.
3. Considering the need of the summary statistics of the data, we provided descriptive statistic and the data discussion.
4. The VECM test has been added to the paper to see the causality interaction of the variables.
5. We rewrote the conclusion, presented the limitation and further analysis of the study and policy implication.
6. We enlarged the reference of the paper.
We greatly appreciate all your comments and suggestions. Thank you very much for your consideration.
Sincerely,
Nur Setyowati.
Authors’ reply to the Reviewer’s Comments
We wish to express our sincere thanks for your very constructive comments. This paper has been revised in accordance with your valuable suggestions. The changes are listed as follows.
(1) The Introduction should refer to the macroeconomic determination and particularities of banking in Indonesia and contains less literature review. (some of lines 37-62 could be moved to a new section Literature Review).
Authors’s Reply:
Accepted, we followed your suggestion to add some paragraph about Islamic banking in Indonesia, macroeconomic determination on banking and moved some literature review into the next section. Please refer to line 40 to 65 on the introduction.
(2) A new section called Literature Review could be added and improved (some basis are present in the paper at lines 37-62).
Authors’s Reply:
Accepted, we added new section of literature review on line 83 to 140.
(3) There is no Descriptive Statistics about the data. Descriptive statistics should be inserted (possibly starting from line 142). There is also a need to compare the data used in the paper with other samples from different studies.
Authors’s Reply:
Accepted, we added descriptive statistic to the paper (see Table 1. Summary Statistics of the Variables at line 235), we also added some discussion about descriptive variable on line 227 to 233. Since all the data and results used by other paper are already stated in literature review, we summarized the comparison of the data used in other paper in line 216 to 219.
(4) The interactions, causality and impulse responses are thoroughly presented in the article. The tests and impulse response are normally used as premises to further analysis such as econometric models.
Authors’s Reply:
Yes, we did use impulse response for further analysis as we found the causality between each variables on the Granger test. The impulse response help to see the dynamic response of deposit and financing to the others variables shocks.
(5) An econometric model that should analyze the variable interactions is needed (probably an ARDL or VECM one).
Authors’s Reply:
Accepted, we add the VECM model and the results are presented in Table 4. The VECM Result of Deposit and Financing Estimation. The discussion about the VECM results are presented in line 293 to 308.
(6) The conclusions are quite narrow. It should be improved by taking into considerations the limitations of the study, results in line with other studies and future / further analysis.
Authors’s Reply:
Accepted, we rewrote the conclusion paragraph and added limitation and further analysis of the study, policy implication and the studies which is in line with our results. Please refer to line 434 to 456.
(7) The references are insufficient regarding the number of analyzed papers (only 34) and could be extended if Literature Review is added to the article.
Authors’s Reply:
Accepted, as we add literature review, there are also more reference cite in the paper (account 44).
Author Response File: 
Author Response.pdf
Reviewer 2 Report
The work has a very clear focus and is well structured. I can not make a criticism about the methodology because I'm not familiar with it.
The work has a very clear weak point, the conclusions section. These conclusions should be expanded, in addition to expanding in the technical aspect, they should also be translated as regards the practical implications of these results. This work should present the results in an intuitive way, highlighting conclusions applied to this country, the comparison between the two types of banks and the implications that entails.
It would be interesting to quote some works of this magazine, to connect with the previously published research in it.
I think these are the main points of improvement that I can highlight to improve the quality of this work.
Thank you for the opportunity to have read this manuscript.
Author Response
Dear Editors and anonymous referees,
We are more grateful for the letter dated April 23, 2019, which kindly provides us with the opportunity to revise our paper for Economies. It has been thoroughly revised following the helpful and constructive comments made by the Editor-in-chief and the anonymous referees. We highlighted the changes to our manuscript in red-colored text and believed that we have successfully addressed all the suggestions. The following are the summary of our responses to the referees’ comments.
1. We rewrote the introduction part and added some information about Islamic banking in Indonesia, macroeconomic determination on banking and moved some literature review into the next section.
2. New section of literature review has been added to the paper.
3. Considering the need of the summary statistics of the data, we provided descriptive statistic and the data discussion.
4. The VECM test has been added to the paper to see the causality interaction of the variables.
5. We rewrote the conclusion, presented the limitation and further analysis of the study and policy implication.
6. We enlarged the reference of the paper.
We greatly appreciate all your comments and suggestions. Thank you very much for your consideration.
Sincerely,
Nur Setyowati.
We wish to express our sincere thanks for your very constructive comments. This paper has been revised in accordance with your valuable suggestions. The changes are listed as follows.
(1) The work has a very clear weak point, the conclusions section. These conclusions should be expanded, in addition to expanding in the technical aspect, they should also be translated as regards the practical implications of these results. This work should present the results in an intuitive way, highlighting conclusions applied to this country, the comparison between the two types of banks and the implications that entails.
Authors’s Reply:
Accepted, we rewrite the conclusion paragraph (please see line 434 to 456). We also add limitation and further analysis of the study, practical implication of the results, comparison between two banks as highlighted on interest rate (please see 436 to 440), and the studies which is in line with our results.
(2) It would be interesting to quote some works of this magazine, to connect with the previously published research in it.
Authors’s Reply:
Accepted, as we go through the magazine, we found two articles related to our study (reference No. 10 and 43). First article by Ervani and Vasigh (2018) is presented on line 246-250 and Yuksel, et.al, 2018 is presented on line 324 to 327.
Author Response File: Author Response.pdf
Round 2
Reviewer 1 Report
All suggestions were taken into consideration, and the paper has been significantly improved.
Author Response
Authors’ reply to the Reviewer’s Comments
We wish to express our sincere thanks for your very constructive comments. This paper has been revised in accordance with your valuable suggestions. As we took all the suggestions from the reviewers, we significantly improved our paper.
We greatly appreciate all your comments and suggestions. Thank you very much for your consideration.
Sincerely,
Nur Setyowati.
