EconPapers    
Economics at your fingertips  
 

Performance of Islamic and conventional banks: A meta-frontier approach

Mariani Abdul-Majid (), Manizheh Falahaty and Mansor Jusoh

Research in International Business and Finance, 2017, vol. 42, issue C, 1327-1335

Abstract: This study conducts a stochastic frontier analysis and adopts meta-frontier approach towards Malaysian banks’ data and finds that conventional banks are more cost efficient than Islamic ones. The primary factors contributing to the differences in efficiency between the two banks are the wide disparity from their respective best banks and technological constraints. While few Islamic banks use technologies that are similar and close to the industry’s standard, many others have diverse technologies. The latter can be attributed to differences in organisational structure and operational processes. By contrast, conventional banks are closer in terms of structure and processes to their best bank and adopt technologies that are almost similar to those used in the industry. These findings show that a different treatment is required in terms of the policy, regulations, and management for both bank types, a key implication for policy makers, bank regulators, and industry players.

Keywords: Meta-frontiers; Islamic banks; Bank efficiency (search for similar items in EconPapers)
JEL-codes: G20 G21 Z12 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0275531916304408
Full text for ScienceDirect subscribers only

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:eee:riibaf:v:42:y:2017:i:c:p:1327-1335

Access Statistics for this article

Research in International Business and Finance is currently edited by T. Lagoarde Segot

More articles in Research in International Business and Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-09-28
Handle: RePEc:eee:riibaf:v:42:y:2017:i:c:p:1327-1335