Bootstrap Dea Efficiencies of the GCC Islamic Banks: Sources and Comparison During 2014-2016

Abstract

This paper, first, obtained three categories of efficiencies, overall bias-corrected technical efficiency (OTEBC), bias-corrected pure technical efficiency (PTEBC) and bias-corrected scale efficiency (SE) of the Islamic banks of the Gulf Cooperating Countries (GCC) during 2014-2016 using the Simar and Wilson (1998) Bootstrap data envelopment analysis (DEA). Second, decomposing the overall bias-corrected technical efficiency (OTEBC) the paper found the bias-corrected pure technical efficiency (PTEBC) and the bias-corrected scale efficiency (SE) were 91% and 59.8% respectively and thus PTEBC dominated the OTBBC (82.4%) and the SE (59.8%) of the GCC Islamic banks. Third, the paper found the sources of the inefficiency of the Islamic banks of the GCC was the DRS. Except the Islamic banks of Qatar, banks of the GCC countries were inefficient either because they operated under the IRS or DRS. DRS was the major source of inefficiency. Qatar Islamic banks demonstrated the highest level of efficiency in all three efficiency among GCC. The paper provides suggestions for future study.

The Efficiency Analysis of Large Banks Using the Bootstrap and Fuzzy DEA: A Case of an Emerging Market

“…Decomposing the OTEBC, the paper found the PTEBC and the SE were 91% and 59.8%, respectively, and thus PTEBC was greater than the OTBBC (82.4%) and the SE (59.8%) of the GCC Islamic banks [16]. Although the paper found that most banks of the GCC region were inefficient because they operated under either increasing or decreasing returns to scale (IRS or DRS), DRS was the major source of inefficiency [16].…”

“…A comparison of BDEA with the black box DEA model concluded that the network BDEA provides more insightful and accurate results in terms of banks' efficiencies [15]. Samad [16] obtained overall bias-corrected technical efficiency (OTEBC), bias-corrected pure technical efficiency (PTEBC) and biascorrected scale efficiency (SE) of the Islamic banks of the Gulf Cooperating Countries (GCC) during 2014-2016 using the Simar and Wilson [17] BDEA. Decomposing the OTEBC, the paper found the PTEBC and the SE were 91% and 59.8%, respectively, and thus PTEBC was greater than the OTBBC (82.4%) and the SE (59.8%) of the GCC Islamic banks [16].…”

“…Samad [16] obtained overall bias-corrected technical efficiency (OTEBC), bias-corrected pure technical efficiency (PTEBC) and biascorrected scale efficiency (SE) of the Islamic banks of the Gulf Cooperating Countries (GCC) during 2014-2016 using the Simar and Wilson [17] BDEA. Decomposing the OTEBC, the paper found the PTEBC and the SE were 91% and 59.8%, respectively, and thus PTEBC was greater than the OTBBC (82.4%) and the SE (59.8%) of the GCC Islamic banks [16]. Although the paper found that most banks of the GCC region were inefficient because they operated under either increasing or decreasing returns to scale (IRS or DRS), DRS was the major source of inefficiency [16].…”