Performance and Productivity in Islamic and Conventional Banks : Evidence from the Global Financial Crisis

Johnes, Jill and Izzeldin, Marwan and Pappas, Vasileios and Alexakis, Christos (2019) Performance and Productivity in Islamic and Conventional Banks : Evidence from the Global Financial Crisis. Economic Modelling, 79. pp. 1-14. ISSN 0264-9993

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We assess the performance and productivity of Islamic and conventional banks using financial ratios, a two- and a four-component meta-frontier Malmquist productivity index (MPI). We focus on the relatively homogenous GCC region over the 2006-2012 period that covers the global financial crisis. We find that Islamic banks exhibit worse cost and profit performance but are on a par with regards to revenue performance compared to the conventional ones. The components of the meta-frontier MPI suggest that the technology of conventional banks improves markedly in years leading to the financial crisis and declines thereafter. Islamic banks show a similar but more muted pattern. By contrast, the pronounced within-Islamic bank group variation in technical efficiency and technology suggest that Islamic banks are quite heterogeneous as a group. Overall, the MPI analysis suggests that the two bank types are more aligned following the global financial crisis. Policy implications are subsequently discussed.

Item Type:
Journal Article
Journal or Publication Title:
Economic Modelling
Additional Information:
This is the author’s version of a work that was accepted for publication in Economic Modelling. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Economic Modelling, 79, 2019 DOI: 10.1016/j.econmod.2018.09.030
Uncontrolled Keywords:
?? performancebanking sectorfinancial ratiosmeta-frontier malmquist productivity analysisgulf cooperation councilc14g21economics and econometrics ??
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Deposited On:
05 Oct 2018 10:00
Last Modified:
17 Dec 2023 01:41