Analysis of Total Factor Productivity Changes in Islamic and Conventional Banks: Empirical Evidence from Three Regions

Ribed Vianneca W Jubilee (), Fakarudin Kamarudin (), Hafezali Iqbal Hussain, Ahmed Razman Abdul Latiff () and Nurazilah Zainal ()

International Journal of Management and Sustainability, 2020, vol. 9, issue 3, 161-180

Abstract: The objective of this study is to examine total factor productivity changes (TFPCH) in Islamic and conventional banks to determine whether they exhibit progression or regression. As earlier studies have focused mainly on productivity in conventional banks rather than Islamic banks, the current study aims to bridge the gap in the literature by investigating both types of bank in the Middle East, Southeast Asia, and South Asia. A total of 385 Islamic and conventional banks from 18 countries were selected, with data acquired for the period from 2008 to 2017. Panel data analysis was undertaken using DEA-based MPI to investigate the impact of selected determinants of banks’ productivity, as indicated by TFPCH. The results from both the t-test and nonparametric tests revealed that Islamic banks are more productive than conventional banks, which can be attributed to the increase in efficiency changes. However, no statistically significant difference in productivity exists between the types of bank. The main contribution of this study is that it provides not only corroboration for previous studies but also additional insight into bank productivity in Islamic and conventional banks, which will be important to banks, regulators, investors, and researchers.

Keywords: Total factor productivity change; Malmquist productivity index; Islamic banks; Conventional banks; Middle East; Southeast Asia; South Asia (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://archive.conscientiabeam.com/index.php/11/article/view/1082/1527 (application/pdf)
https://archive.conscientiabeam.com/index.php/11/article/view/1082/4672 (text/html)

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:pkp:ijomas:v:9:y:2020:i:3:p:161-180:id:1082

Access Statistics for this article

More articles in International Journal of Management and Sustainability from Conscientia Beam
Bibliographic data for series maintained by Dim Michael ().