EconPapers    
Economics at your fingertips  
 

New evidence on Islamic and conventional bank efficiency: A meta‐regression analysis

Mohamed Chaffai

Bulletin of Economic Research, 2022, vol. 74, issue 1, 221-246

Abstract: This paper aims to conduct a comparison of the efficiency of Islamic banks (IBs) versus conventional banks (CBs) based on meta‐analysis. Empirical studies in this field, mainly in MENA or Gulf Cooperation Country regions, usually provide mixed conclusions and we do not know the reasons of this discrepancy in the results. We conduct a meta‐regression analysis (MRA) that is based on 35 studies and includes 484 estimates of efficiency scores by bank type among other characteristics. We employ Bayesian averaging technique to identify the main covariates explaining the heterogeneity of the results. Our findings suggest, first, no evidence of the superiority of one banking system over the other, neither in terms of technical, cost or profit efficiency. Second, we identify several important bank's and sample characteristics that have also important impacts on the provided efficiency estimates. Third, when we compare the studies into those who conduct a deep statistical comparison of the efficiency distributions by bank type and those who omit to do it, we find that CBs outperform IBs, suggesting a potential publication bias. Finally, with respect to the inefficiency, MRA suggests that the regions banking systems suffer from the inability of banks to maximize profit, so they are much less profitable than it should be. There are also some managerial deficiencies linked to cost minimization, rendering the region's banking system costly, compared to some deficiencies in the overall banking production process itself (technical efficiency).

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/boer.12291

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:buecrs:v:74:y:2022:i:1:p:221-246

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0307-3378

Access Statistics for this article

More articles in Bulletin of Economic Research from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2022-11-17
Handle: RePEc:bla:buecrs:v:74:y:2022:i:1:p:221-246