Efficiency in Islamic and conventional banking: an international comparison

Majid, Mariani Abdul; Saal, David S.; Battisti, Giuliana

doi:10.1007/s11123-009-0165-3

Cited by 167 publications

(85 citation statements)

References 51 publications

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“…The main sizeable body of studies has explained the general Islamic principles and the product used in Islamic banking (Bashir, 1983;Khan, 1985;Siddiqi, 2006: Sundararajan & Errico, 2002. Current researches have discussed the management, regulatory and supervisory challenges associated with Islamic banking (Daly & Frikha, 2015;Jobst, 2007;Murjan & Ruza, 2002;Sole, 2007) the efficiency of IBs using frontier analysis approaches such as data envelopment analysis and stochastic frontier analysis (Abdul-Majid et al, 2010;Belanes & Hassiki, 2011;Srairi, 2010), the characteristics and profitability of IBs (Abedifar, Molyneux, & Tarazi, 2013;Beck et al, 2013;Ben Khediri & Ben-Khedhiri, 2009;Karim & Ali, 1989;Srairi, 2008), and whether it is possible to distinguish between IBs and CBs (Iqbal, 2001;Metwally, 1997;Olson & Zoubi, 2008). Another strand of literature studied the soundness, resilience and financial stability of IBs during the global financial crisis (Abedifar, Philip, & Amine, 2013;Beck et al, 2013;Bourkhis & Nabi, 2013;Caby & Boumediene, 2013;Čihák & Hesse, 2010;Daly, Ghorbel-Zouari, & Frikha, 2013;Hasan & Dridi, 2010).…”

Section: Regression Resultsmentioning

confidence: 99%

“…In fact, during this crisis, although IBs showed their performance, Bashir (2000), their profitability Bashir and Hameed (2003), and their stability Cihak and Hesse (2008), Čihák and Hesse (2010), some studies quote that IBs do not have any advantages in efficiency and stability (Kuran, 2004). The relative efficiency of those non-usurious banks is appreciated by the following studies (Abdul- Majid, Saal, & Battisti, 2010;Darrat et al, 2002;ElGamal & Inanoglu, 2005;Hassan, 2005;Sufian & Akbar Noor Mohamad Noor, 2009;Srairi (2010). Moreover, as shown in recent research, Ben Khediri, Charfeddine, and Ben Youssef (2014) found that the financial crisis has a negative impact on both IBs and CBs but time shifted.…”

Section: Descriptive Statisticsmentioning

confidence: 99%

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Banks and economic growth in developing countries: What about Islamic banks?

Daly

Frikha

2016

Cogent Economics & Finance

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Islamic banks (IBs) have a significant role in the growth of gross domestic product of the developing countries. The Islamic participatory schemes integrate the assets of lenders and borrowers. They allow enable IBs to lend on a longer term basis to create projects with higher risk-return profiles and, thus, to support economic growth. Our investigation examines the contribution of Islamic finance in economic growth. Using a panel data-set, we compare between IBs and conventional banks in their adding to economic growth. We studied a sample of 120 banks between 2005 and 2012. By means of three ordinary least-square regressions, our empirical investigation reveals that the development of non-usurious banks supports economic growth. Moreover, the cooperation between the two financing modes improves economic growth. The integration of this new funding never neglected the role of the conventional method of financing. The practice of IBs is also away from their theoretical mode in terms of participation results.

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Section: Regression Resultsmentioning

confidence: 99%

Section: Descriptive Statisticsmentioning

confidence: 99%

Banks and economic growth in developing countries: What about Islamic banks?

Daly

Frikha

2016

Cogent Economics & Finance

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“…Yet the Islamic banking system, due to constraints imposed by Shariah law, is less efficient than the conventional one (Johnes et al 2014;Abdul-Majid et al 2010) 4 Empirical results…”

Section: Preliminary Data Analysismentioning

confidence: 99%

A Survival Analysis of Islamic and Conventional Banks

et al. 2016

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By comparing the failure risk for both bank types, we find that Islamic banks have a significantly lower risk of failure than that of their conventional peers. This lower risk is based both unconditionally and conditionally on bank-specific (microeconomic) variables as well as macroeconomic and market structure variables. Our findings indicate that the design and implementation of early warning systems for bank failure should recognize the distinct risk profiles of the two bank types.

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“…The emergence of Islamic banking has been driven by the increasing number of Muslims who wish to lead their lives according to the Shariah, the legal code of Islam (Abdul-Majid, Saal, & Battisti, 2010). The existence of Islamic banks in the second half of the 20th Century came as an offshoot of the newly rediscovered Islamic economics (Kahf, 2002).…”

Section: Introductionmentioning

confidence: 99%

“…The salient features of Islamic banking are the prohibition of interest payment in transactions, and the prohibition of undertaking or financing anti-social and unethical behaviour such as gambling, pornography and alcohol (Abdul-Majid, Saal, & Battisti, 2010).…”

Section: Introductionmentioning

confidence: 99%

Islamic Banking System as an effective element of economy

Al-augby¹,

Majewski²,

Nermend³

et al. 2015

Zesz. Nauk. US Fin. Ryn. Fin. Ubezp.

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Abstract:The main goal of this paper is to present what the Islamic banks (the type of banks governs by Islamic law that governs every aspect of Muslims' life "Shariah") instruments are and why it is so important for the community. According to Shariah the payment or acceptance of interest charges (Riba) is prohibited in Islamic banking transactions. This paper is tried to describe the main features of the Islamic banking transactions and to identify the differences between Islamic and conventional banks. Also, this paper presents a survey of the historical evolution of the Islamic banking system in Muslim countries, starting with the first Islamic bank, early in the 1960's, Nasser Bank in Egypt. In conclusion, the Islamic banking system is a rapid growth one and the switch to Islamic banking will be a difficult task. Due to the fact, that in the last decade, the Islamic banking made its presence in all over the world markets not just in Islamic countries.

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Efficiency in Islamic and conventional banking: an international comparison

Abstract: Islamic banking, International efficiency comparison, Output distance function, G21, D24, L1,

Cited by 167 publications

References 51 publications

Banks and economic growth in developing countries: What about Islamic banks?

Banks and economic growth in developing countries: What about Islamic banks?

A Survival Analysis of Islamic and Conventional Banks

Islamic Banking System as an effective element of economy

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