Comparative performance analysis between conventional and Islamic banks: empirical evidence from OIC countries

Mobarek, Asma; Kalonov, Alovaddin

doi:10.1080/00036846.2013.839863

Cited by 77 publications

(58 citation statements)

References 28 publications

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“…This result was also confirmed by Mobarek and Kalonov (2014) (2014) showed that, contrary to previous findings, pure technical inefficiency is the main source of Islamic banks' technical inefficiency.…”

Section: Literature Reviewcontrasting

confidence: 45%

“…However, this decline could also be due to the fact that in the last two years of the study period MENA Islamic banks were operating in a business environment more favorable to the development of conventional banks. Indeed, several empirical analyses have demonstrated that conventional banks have performed better than Islamic banks after the global financial crisis period (Mobarek & Kalonov, 2014;Alqahtani et al, 2016, etc.). From these results we can suggest that managers of MENA Islamic banks should improve their performance in allocating resources.…”

Section: Discussionmentioning

confidence: 99%

“…This is also true in the case of Islamic banks. Indeed, most empirical studies dealing with Islamic bank efficiency have adopted the intermediation approach considering these banks as financial intermediaries providing funds to investors and collecting deposits from depositors (see, Yudistira, 2004;Sufian & Nour, 2009;Mobarek & Kalonov, 2014;etc. ).…”

Section: Inputs and Outputs Of Islamic Banksmentioning

confidence: 99%

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Technical efficiency analysis of MENA Islamic banks during and after the global financial crisis

Bahrini¹

2016

JIBF

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Despite that the most impressive growth rates realized by Islamic banks was recorded in the Middle East and North Africa (MENA) region, few empirical studies have analyzed their performance especially in the global financial crisis period. Given this, in our paper we measure and analyze the technical efficiency of a sample of 33 MENA Islamic banks during and after the global financial crisis period (2006)(2007)(2008)(2009)(2010)(2011)(2012). To do this, we apply the bootstrap Data Envelopment Analysis (DEA) approach, which is a robust method that allowed us to correct the estimation bias and to construct confidence intervals for the estimated efficiency scores at desired levels of significance. Our results show that over the period of study the technical inefficiency of MENA Islamic banks was mainly explained by pure technical inefficiency rather than scale inefficiency. In addition, we find that all MENA Islamic banks' efficiency levels have increased during the global financial crisis period (2007)(2008) and in the early post-crisis period (2009)(2010) before decreasing in the last two years of the study period (2011)(2012). According to our findings, we suggest that the managers of MENA Islamic banks should focus more on improving their managerial performance rather than on increasing the scale of operations. We also recommend that supervisory authorities in MENA countries undertake many regulatory and financial measures in order to support the development of Islamic banking in the MENA region.

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Section: Literature Reviewcontrasting

confidence: 45%

Section: Discussionmentioning

confidence: 99%

Section: Inputs and Outputs Of Islamic Banksmentioning

confidence: 99%

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Technical efficiency analysis of MENA Islamic banks during and after the global financial crisis

Bahrini¹

2016

JIBF

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“…Several comparative studies have found that MENA Islamic banks were less technically efficient than conventional banks, particularly in the post-crisis period (see Mobarek and Kalonov [37], Johnes et al [39], among others). This was argued by the fact that MENA Islamic banks suffer from a legal framework that is not adapted to their specific nature, a scarcity of qualified human capital, and a lack of diversification and innovation.…”

Section: Decomposition Of Overall Technical Efficiencymentioning

confidence: 99%

“…Indeed, the majority of previous studies on the efficiency of Islamic banks have used the intermediation approach (Yudistira [19], Sufian and Nour [20], Mobarek and Kalonov [37], Aghimien et al [22], etc.). Given this, in our study, we adopt the intermediation approach, according to which, MENA Islamic banks are considered as financial intermediaries that produce two outputs: total loans (Y1), which include Murabaha and deferred sales, Ijara (leasing and hire purchase), Mudarabah (profit-sharing) and Musharakah (partnership); and other earning assets (Y2), which include investments in companies, securities, properties and real estate.…”

Section: Variablesmentioning

confidence: 99%

Efficiency Analysis of Islamic Banks in the Middle East and North Africa Region: A Bootstrap DEA Approach

Bahrini

2017

IJFS

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This paper measures and analyzes the technical efficiency of Islamic banks in the Middle East and North Africa (MENA) region during the period 2007-2012. To do this, the bootstrap Data Envelopment Analysis (DEA) approach was employed in order to provide a robust estimation of the overall technical efficiency and its components: pure technical efficiency and scale efficiency in the case of MENA Islamic banks. The main results show that over the period of study, pure technical inefficiency was the main source of overall technical inefficiency instead of scale inefficiency. This finding was confirmed for all MENA Islamic banks as well as for the two subsamples: Gulf Cooperation Council (GCC) and non-GCC Islamic banks. Furthermore, our results show that GCC Islamic banks had stable efficiency scores during the global financial crisis (2007)(2008) and in the early post-crisis period (2009)(2010). However, a decline in overall technical efficiency of all panels of MENA Islamic banks was recorded in the last two years of the study period (2011)(2012). Thus, we recommend that MENA Islamic bank managers focus more on improving their management practices rather than increasing their sizes. We also recommend that financial authorities in MENA countries implement several regulatory and financial measures in order to ensure the development of MENA Islamic banking.

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The Relationship Between the Performance of Islamic and Conventional Banks

Causevic

2018

Lecture Notes in Networks and Systems

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Comparative performance analysis between conventional and Islamic banks: empirical evidence from OIC countries

Cited by 77 publications

References 28 publications

Technical efficiency analysis of MENA Islamic banks during and after the global financial crisis

Technical efficiency analysis of MENA Islamic banks during and after the global financial crisis

Efficiency Analysis of Islamic Banks in the Middle East and North Africa Region: A Bootstrap DEA Approach

The Relationship Between the Performance of Islamic and Conventional Banks

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