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Financial stability efficiency of Islamic and conventional banks

Md Safiullah

Pacific-Basin Finance Journal, 2021, vol. 68, issue C

Abstract: We examine the financial stability efficiency of Islamic and conventional banks. We employ a meta-frontier stability function approach based on stochastic frontier framework to estimate financial stability efficiency of both bank groups, drawing on a sample of Islamic and conventional banks from 28 countries over the period 2003–2018. Our study result shows that Islamic banks have 5.30% higher stability efficiency compared to conventional banks. This result is robust when we examine country-wise and geographical region-wise stability efficiency of Islamic and conventional banks.

Keywords: Financial stability efficiency; Islamic banking; Stochastic meta-frontier (search for similar items in EconPapers)
JEL-codes: D24 G21 G28 G34 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:68:y:2021:i:c:s0927538x21000949

DOI: 10.1016/j.pacfin.2021.101587

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