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

Abdus Samad
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Abdus Samad: Department of Finance and Economics, Utah Valley University 800 W University PKWY Orem, UT 84058, USA

International Journal of Economics and Financial Issues, 2021, vol. 11, issue 1, 157-166

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.

Keywords: GCC Islamic Banks; Technical efficiency; Bootstrap DEA; Bias-corrected Technical Efficiency (search for similar items in EconPapers)
JEL-codes: C14 G21 G22 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2021-01-17

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