<![CDATA[This study aims to examine the relationship between concentration and efficiency in the Indonesian Sharia general insurance industry and to identify the direction of causality between variables. A quantitative approach is employed using data from 2018–2023. Market concentration is measured using the Herfindahl–Hirschman Index (HHI), while efficiency is estimated through Data Envelopment Analysis (DEA). The dynamic relationship is analyzed using a Vector Autoregression (VAR) framework, including stationarity testing, optimal lag selection, and stability testing. The causal relationship is further investigated using Granger causality. The findings indicate that although market concentration demonstrates a gradual upward trend and efficiency levels vary across firms, the Granger causality analysis provides no evidence of a statistically significant causal relationship between the two variables. Specifically, neither market concentration Granger-causes efficiency nor efficiency Granger-causes concentration. The findings imply that market structure, as reflected by concentration levels, does not directly determine efficiency performance in the Indonesian Islamic general insurance industry. This suggests that firm-level factors such as managerial capability, resource allocation, and operational strategy play a more critical role in driving efficiency than external market concentration. Thus, policymakers should focus on strengthening firm competitiveness and operational performance rather than relying solely on market structure adjustments. The novelty of this research lies in integrating concentration and efficiency with VAR Granger Causality approaches to analyze the dynamic interaction between market concentration and efficiency in the Sharia general insurance industry.]]>
