Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


Competitive Advantage Model and its Implication on the Performance of Islamic Rural Banks in Java Island

Author(s): Irfan Soleh, Ernie Tisnawati Sule, Joeliaty, Sutisna

The purpose of this study is to investigate the effect of Maqashid Shariah, core competencies, and industrial environment on the competitive advantage and its implication on the performance of Islamic Rural Banks in Java Island. This research is conducted by a quantitative methods with the type of descriptive and verification research through a survey involving 62 Sharia Rural Banks in Java. Data is obtained from the observations and distributing questionnaires. The analysis tool to test the hypothesis is Partial Least Square (PLS). The results show that simultaneously, Maqashid Shariah, Core Competencies, and Industrial Environment influence Competitive Advantage. While partially, Maqashid Shariah and Industrial Environment do not affect Competitive Advantage, only Core Competencies that has a significant effect on Competitive Advantage. Then, Maqashid Shariah, Core Competencies, and Industrial Environment simultaneously significantly influence the Performance. Partially, Maqashid Shariah and the Industrial Environment influence Performance. However, Core Competencies does not significantly influence Performance. The partial test results show that competitive advantage has an effect onthe Sharia Rural Bank Performance. The model produced in this study is expected to contribute to the management of Sharia Rural Bank in Java in an effort to improve its performance through the development of the Maqashid Shariah, competitive advantage, and adaptation to the industrial environment, which is built by developing core competencies.

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