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Efficiency and client satisfaction of Islamic and conventional banks: A bilateral effect

Talla Aldeehani

Business and Economic Horizons (BEH), 2018, vol. 14, issue 2, 282-299

Abstract: In this paper, we investigate the possible bidirectional causal relationship between bank efficiency and client satisfaction in the banking sector of Kuwait. For this purpose, we applied structural equation model (SEM) methodology. Based on a 5-point Likert scale questionnaire, data was gathered from Islamic banks (IBs) clients and conventional banks (CBs) client. We found a significant evidence of a, relatively, higher client satisfaction for IBs. The findings, also, provide evidence of a positive and significant bilateral causal relationship between client satisfaction and bank efficiency. This is a result that confirms an anticipated theoretical proposition related to the ultimate goal of firm value maximization. Discussions, interpretations, implications, and recommendations are provided.

Keywords: Bank efficiency; Islamic banks; customer satisfaction bilateral effects (search for similar items in EconPapers)
JEL-codes: G20 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:pdc:jrnbeh:v:14:y:2018:i:2:p:282-299