This study employs data envelope analysis to produce the efficiency measures for both Islamic and conventional banks and conducts the means tests to investigate the efficiency comparison between the two bank types in the Gulf Cooperation Council (GCC) countries. 28 conventional banks and 20 Islamic banks are selected across the six countries in the GCC according to data availability for the period 2006 -2012. Two output variables, total loans and investments, and four input variables, total deposit, equity, fixed assets and general expenses are used in the DEA. Under the assumption of constant return to scale, no evidence is found for efficiency difference between the two bank types; and under the assumption of variable return to scale, the conventional banks are found to be more efficient than their Islamic counterparts in two points of time, 2009 and 2010, following the 2008 financial crisis. For within country efficiency comparisons, the two bank types are the same in Saudi Arabia, Kuwait and Qatar. The conventional banks are found to be more efficient than their Islamic counterparts in Bahrain and Emirates. The paper finds no evidence for the presence of technological improvements in the banking operations as indicated by the Malmquist productivity analysis.
This paper studies the technical efficiency of Saudi banking sector using stochastic frontier model. A sample of 12 banks over the period 2000 -2011 is selected to investigate their technical efficiencies in mobilizing deposits, allocating investments and generating income. The banks are categorized as Saudi-owned banks, Saudi -foreign owned banks and Islamic banks. The findings show some consistent pattern of these bank types; and there exist significant disparities among the banks in terms of technical efficiency. The banque Saudi Fransi stands out as a benchmark for the industry, and it is a Saudi -foreign owned bank type. The Saudi owned bank type has shown fluctuating performance during the period; and the Islamic bank type is not significantly different from Saudi-owned bank type. Keywords: technical efficiency, stochastic frontier analysis, bank type Contributions and implications of the paper: The paper appears to be the second of its kind, after Alkhathlan et al (2010) to study the technical efficiency of Saudi banks. The paper distinguishes itself from the previous work of Alkhathlan et al (2010) by adding the dimensions of philosophical foundations and ownership structures of the banks in the analysis. It also expands the analysis by looking at three output variables instead of one output variable. The paper tends to raises a further research question concerning the relationship between the bank performance and its ownership structure and philosophical foundation. Though, the current paper tends to suggest that there exists a relationship between the two; further researches with different samples from Saudi market and around the world are suggested to test this relationship.
1. The paper focuses on agriculture and economic growth nexus in Gambia. 2. The paper utilizes extensive historical context to the agriculture policies adapted so far in Gambia. 3. The window of the study is 1966 to 2009. 4. A vector error correction technique to examine the growth-agriculture relation in the Gambia is applied. 5. Interestingly, the capital per worker is found to be a significant and relevant factor input for the economic growth, while agricultural labor per acre is irrelevant in both the short run and the long run analyses.
Purpose -The purpose of this paper is to investigate the factors of technology diffusion in Saudi Arabia. It is a relevant study for Saudi Arabia, which has embarked on high gears of economic modernization that is supposed to be driven by technology and knowledge. Thus, an up-to-date research on the factors of technology diffusion in the country is expected to be of high-valued contribution. Design/methodology/approach -It employs co-integration method to analyse the long run relations between the technology diffusion and its determinants. Findings -The study finds that the international trade, particularly the oil sector trade, of the Saudi Arabia appears to play no relevant role in the international technology transfer for Saudi Arabia. The study confirms that technology is an endogenous variable in the presence of human capital; and that the higher levels of educational attainments are found to significantly improve factor productivity. The foreign direct investment (FDI) stock is confirmed to be a consistent and important factor in the process of technology diffusion. The capital goods imports and the domestic R&D expenditure are found to be negatively associated with the technology diffusion.Research limitations/implications -The machine and transport equipment imports are used by the study as a measure of capital goods imports, and thus a better measure is needed in a further research. Similarly, the limited data on the domestic R&D expenditure has forced the author to rely on estimates and own calculations. Thus, these data limitations could not allow us to have better understanding of the impacts of capital goods imports and domestic R&D on the technology diffusion. Practical implications -Human capital and FDIs are the key drivers the Saudi authorities should consider for transferring and diffusing technology in the country and expanding non-oil sources of economic growth. Originality/value -This paper is a first of its kind for the case of Saudi Arabia to analyze the determinants of technology diffusion and investigate the role of the its oil sector trade in the technology diffusion. The oil sector trade is found insignificant in the international technology diffusion process; thus the authorities should refocus the oil sector trade towards technology localization and adoption to increase integrative by-product industries in the country.
Credit card, which is one of the noncash payment methods, has been growing exponentially. Credit card generally uses credit balances advanced by the banks to make payments. The banks charge cardholders for using the credit payment system or based on the outstanding balances owed. Charging fees based on the outstanding balances can tantamount to Riba Nasi'ah. To avoid thisRiba, the Islamic banks have packaged their cards based on certain Islamic 'transaction principles'. These packages include Charge cards, Qard Al-hasan cards, Bay Al-Inah cards, Tawarruq cards, and Murabahah cards.Some of these packages have become subjects of increasing juristic criticism. I review these packages and conclude that they suffer either from reduced Shari'ah compliance or high price.I propose an alternative package that could minimize the juristic criticisms and improve competitiveness. It extends the Tawarruq package by introducing a buy-and-hold element in the ownership of the underlying asset. It eliminates the need for revolving money credit that can attract interest charges and replaces it with cash reserve and asset holding that the cardholder replenishes as he/she makes repayments into his/her card. 2
The Country Diagnostic Study (CDS) for United Arab Emirates (U.A.E.) uses the Hausmann-Rodrik-Velasco growth diagnostics model to identify the binding constraints being faced in its quest for higher economic growth and make recommendations to relax these constraints. Hence, the findings of the CDS can help the Islamic Development Bank in identifying areas where it can have a greater impact and provide an evidence basis to support the development of the Member Country Partnership Strategy. U.A.E.’s development journey has been painstakingly crafted over time, with the latest being Vision 2021. Launched in 2010 and in the aftermath of the global financial crisis (GFC), Vision 2021 was designed to place the U.A.E. among the best nations in the world. It has achieved several targets under the competitive knowledge pillar of the Vision, but some key targets related to economic growth, innovation, and knowledge workers are yet to be fully realized. This is because growth has been low and inadequate with relatively low private investment since the 2008–2009 GFC, leading to a lower than potential real GDP trend. To bring in private investment and improve growth, both quantity and quality of human capital may need to be scaled up through improving the education system and spending on research and development to support industry-university collaboration on innovations. Efficient institutional governance in the areas of corruption control, regulatory quality and conducive bureaucracy is necessary for the vibrant functioning of the private sector.
This paper using cross-sectional data on 39 Sub-Saharan African countries examines how political and economic governance affect the most recent data on poverty for the period of 2000-2007. For this period, the paper finds that the average percentages of population living on less than $1.25 a day and on less than $2.00 a day are 50 and 70, respectively in Sub-Saharan Africa. It finds that these percentages can be reduced by a half in 12.5 years and 28 years, respectively if the real per capita gross domestic product (GDP) grows sustainably at 5% per annum. Whereas, at a real per capita GDP growth rate of 7% per annum, the percentages can be reduced by half in 9 and 20 years, respectively. Government expenditures are found irrelevant to the poverty reduction. Similarly, high literacy rates are not found to trickle down to any significant poverty reductions. The political governance variables used in the paper are all found not to contribute towards poverty reductions. The paper confirms strongly that real per capita GDP is what matters most to poverty reductions in Sub-Saharan Africa.
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