Financial stability of Islamic banking and the global financial crisis: Evidence from the Gulf Cooperation Council

Alqahtani, Faisal; Mayes, David G.

doi:10.1016/j.ecosys.2017.09.001

Cited by 113 publications

(110 citation statements)

References 33 publications

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“…The results (see Tables A1-A5) show that the variation between Islamic banks and conventional banks over the global financial crisis is noted only with regard to two performance measures, which are the profitability (as measured by ROA ratio) and efficiency (as measured by the revenue to assets ratio). Moreover, this variation shows that, unlike the findings of some other studies (e.g., Ben Khediri et al, 2015;Hasan & Dridi, 2010;Johnes et al, 2014), the conventional banks shows a better resilience in terms of efficiency and profitability than 5 Based on the work of Iman and Kpodar (2013), Alqahtani and Mayes (2018) recognize the role of oil prices in the expansion of Islamic banks.…”

Section: Resultsmentioning

confidence: 69%

“…Subsequently, other research efforts have broadened their scope and compared the performance between the Islamic banks and conventional banks during 2008 financial crisis on their performance. Alqahtani and Mayes (2018), for example, have evaluated the financial stability of Islamic and conventional banks prior to, during, and after financial shocks from 2000 to 2013. While using a sample of 76 banks across six economies of the GCC region, their study found that large Islamic banks exhibited weaker financial stability than the conventional banks highlighting their vulnerable resilience to shocks that spread over to real economic sectors.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

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The impact of global financial crisis on conventional and Islamic banks in the GCC countries

2018

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Using large dataset from audited financial statements of 81 banks in the Gulf Cooperation Council (GCC) region, this article aims at assessing the performance of Islamic banks and conventional banks during the 2008 financial crisis. Unlike major studies that explored this area of study in the GCC countries, this paper investigates the performance of both types of banks before, during, and after the 2008 financial crisis, while covering four different financial performance measures, namely, efficiency, profitability, liquidity, and solvency. Moreover, this investigation is undertaken while covering a larger time span (2006–2012) than perhaps all similar works that covered similar study on the GCC region. With the use of mixed‐effect linear regression, the paper shows that, compared with Islamic banks, conventional banks have sustained a better performance over the 2006–2012 period in relation to efficiency and return on assets. In this context, the paper puts a note on the shortcomings of the institutional arrangement of the Islamic banks that impeded their performance during the crisis as well as on the active role of GCC governments during the financial crash.

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Section: Resultsmentioning

confidence: 69%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

The impact of global financial crisis on conventional and Islamic banks in the GCC countries

2018

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“…The better performance of IBs relative to CBs stems from their unwillingness to borrow from other banks and depositors, making them less vulnerable to a financial crisis. Alqahtani and Mayes (2018) examined the financial stability of Islamic and commercial banks during the global financial crisis by utilizing panel data of 76 banks in the Gulf Cooperation Council region. Their study revealed small Islamic banks were more stable during the financial crisis, escaping the instability of other financial systems (financial instruments, markets, and institutions).…”

Section: Review Of Literaturementioning

confidence: 99%

The Impact of the Global Financial Crisis on Profitability of the Banking Industry: A Comparative Analysis

Erfani

Vasigh

2018

Economies

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In this paper, the effects of the recent global financial crisis on efficiency and profitability of financial institutions were analyzed. In a comparative study, the impacts of the global financial crisis on the performance of Islamic and commercial banks were examined. The fundamental difference between Islamic and conventional banking is that Islamic banking is founded upon the ethical principles of Islamic tradition and law (Sharia). By utilizing a sample of eight Islamic banks and eleven commercial banks, the impact of the global financial crisis on efficiency and profitability of the banking sector was evaluated. This study covered the period from 2006 to 2013. The results of this research were obtained from the Altman Z-score model, ratio analysis, the data envelopment analysis (DEA) method, and the seemingly unrelated regression (SUR) model. The results show that during the study period, Islamic banks (IBs) managed to maintain their efficiency while most commercial banks (CBs) suffered a loss in their efficiency. Furthermore, this study found that the financial crisis did not have a significant impact on the profitability of Islamic banks.

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“…There are numerous opportunities to extend existing research. Newer studies have begun to extend the comparative analysis between Islamic and conventional banks in terms of financial stability (Alqahtani and Mayes, ), liquidity (Alqahtani et al ., 2017), profitability (Yanikkaya et al ., ), and deposit behaviour in the bond market (Ibrahim and Rizvi, ), among others. More recent research has also begun to move beyond mere comparisons, providing new insights to regulators and market participants.…”

Section: Output–expert Judgementmentioning

confidence: 99%

Machine Learning and Expert Judgement: Analyzing Emerging Topics in Accounting and Finance Research in the Asia–Pacific

Cai

Linnenluecke

Marrone

et al. 2019

Abacus

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In this paper, we focus on the question to what extent machine learning (ML) tools can be used to support systematic literature reviews. We apply a ML approach for topic detection to analyze emerging topics in the literature-our context is accounting and finance research in the Asia-Pacific region. To evaluate the robustness of the approach, we compare findings from the automated ML approach with the results from a manual analysis of the literature. The automated approach uses a keyword algorithm detection mechanism whereby the manual analysis uses common techniques for qualitative data analysis, that is, triangulation between researchers (expert judgement). From our paper, we conclude that both methods have strengths and weaknesses. The automated analysis works well for large corpora of text and provides a very standardized and non-biased way of analyzing the literature. However, the human researcher is potentially better equipped to evaluate current issues and future trends in the literature. Overall, the best results might be achieved when a variety of tools are used together.

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Financial stability of Islamic banking and the global financial crisis: Evidence from the Gulf Cooperation Council

Cited by 113 publications

References 33 publications

The impact of global financial crisis on conventional and Islamic banks in the GCC countries

The impact of global financial crisis on conventional and Islamic banks in the GCC countries

The Impact of the Global Financial Crisis on Profitability of the Banking Industry: A Comparative Analysis

Machine Learning and Expert Judgement: Analyzing Emerging Topics in Accounting and Finance Research in the Asia–Pacific

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