Efficiency of conventional versus Islamic banks: international evidence using the stochastic frontier approach (SFA)
This paper measures and compares the cost and profit efficiency of 80 banks in 21 of Organisation of Islamic Conference (OIC) countries: comprising of 37 conventional banks and 43 Islamic banks, using the Stochastic Frontier Approach (SFA). In addition, it assesses the efficiency of those banks base...
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| Format: | Article |
| Language: | English |
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Islamic Bank Training and Research Academy, Islamic Bank Bangladesh Limited
2008
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| Online Access: | http://psasir.upm.edu.my/id/eprint/14255/ http://psasir.upm.edu.my/id/eprint/14255/1/Efficiency%20of%20conventional%20versus%20Islamic%20banks%20international%20evidence%20using%20the%20stochastic%20frontier%20approach%20%28SFA%29.pdf |
| _version_ | 1848842343047757824 |
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| author | Ramadilli Mohd, Shamsher Mohamad Hassan, Taufiq Bader, Mohammed Khaled I. |
| author_facet | Ramadilli Mohd, Shamsher Mohamad Hassan, Taufiq Bader, Mohammed Khaled I. |
| author_sort | Ramadilli Mohd, Shamsher Mohamad |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This paper measures and compares the cost and profit efficiency of 80 banks in 21 of Organisation of Islamic Conference (OIC) countries: comprising of 37 conventional banks and 43 Islamic banks, using the Stochastic Frontier Approach (SFA). In addition, it assesses the efficiency of those banks based on their size, age, and region. The findings suggest that there are no significant differences between the overall efficiency results of conventional versus Islamic banks. However, there is substantial room for improvement in cost minimisation and profit maximisation in both banking systems. Furthermore, the findings show no significance difference in average efficiency scores between big versus small and new versus old banks in both banking streams. This implies that size and age did not affect the performance of banks in both streams. Overall, the results are in favour of the more recent Islamic banking system. |
| first_indexed | 2025-11-15T07:57:37Z |
| format | Article |
| id | upm-14255 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T07:57:37Z |
| publishDate | 2008 |
| publisher | Islamic Bank Training and Research Academy, Islamic Bank Bangladesh Limited |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-142552018-10-08T02:45:30Z http://psasir.upm.edu.my/id/eprint/14255/ Efficiency of conventional versus Islamic banks: international evidence using the stochastic frontier approach (SFA) Ramadilli Mohd, Shamsher Mohamad Hassan, Taufiq Bader, Mohammed Khaled I. This paper measures and compares the cost and profit efficiency of 80 banks in 21 of Organisation of Islamic Conference (OIC) countries: comprising of 37 conventional banks and 43 Islamic banks, using the Stochastic Frontier Approach (SFA). In addition, it assesses the efficiency of those banks based on their size, age, and region. The findings suggest that there are no significant differences between the overall efficiency results of conventional versus Islamic banks. However, there is substantial room for improvement in cost minimisation and profit maximisation in both banking systems. Furthermore, the findings show no significance difference in average efficiency scores between big versus small and new versus old banks in both banking streams. This implies that size and age did not affect the performance of banks in both streams. Overall, the results are in favour of the more recent Islamic banking system. Islamic Bank Training and Research Academy, Islamic Bank Bangladesh Limited 2008 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/14255/1/Efficiency%20of%20conventional%20versus%20Islamic%20banks%20international%20evidence%20using%20the%20stochastic%20frontier%20approach%20%28SFA%29.pdf Ramadilli Mohd, Shamsher Mohamad and Hassan, Taufiq and Bader, Mohammed Khaled I. (2008) Efficiency of conventional versus Islamic banks: international evidence using the stochastic frontier approach (SFA). Journal of Islamic Economics, Banking and Finance, 4 (2). pp. 107-130. ISSN 2070-4658 http://ibtra.com/journal_back_issue_individual.php?j_id=7 |
| spellingShingle | Ramadilli Mohd, Shamsher Mohamad Hassan, Taufiq Bader, Mohammed Khaled I. Efficiency of conventional versus Islamic banks: international evidence using the stochastic frontier approach (SFA) |
| title | Efficiency of conventional versus Islamic banks: international evidence using the stochastic frontier approach (SFA) |
| title_full | Efficiency of conventional versus Islamic banks: international evidence using the stochastic frontier approach (SFA) |
| title_fullStr | Efficiency of conventional versus Islamic banks: international evidence using the stochastic frontier approach (SFA) |
| title_full_unstemmed | Efficiency of conventional versus Islamic banks: international evidence using the stochastic frontier approach (SFA) |
| title_short | Efficiency of conventional versus Islamic banks: international evidence using the stochastic frontier approach (SFA) |
| title_sort | efficiency of conventional versus islamic banks: international evidence using the stochastic frontier approach (sfa) |
| url | http://psasir.upm.edu.my/id/eprint/14255/ http://psasir.upm.edu.my/id/eprint/14255/ http://psasir.upm.edu.my/id/eprint/14255/1/Efficiency%20of%20conventional%20versus%20Islamic%20banks%20international%20evidence%20using%20the%20stochastic%20frontier%20approach%20%28SFA%29.pdf |