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Cost, revenue, and profit efficiency of Islamic versus conventional banks: international evidence using data envelopment analysis

This paper measures and compares the cost, revenue, and profit efficiency of 43 Islamic and 37 conventional banks over the period 1990-2005 in 21 countries using Data Envelopment Analysis. In addition, it assesses the efficiency of those banks based on their size, age, and region. The findings sugge...

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Main Authors: Shamsher, Mohamad, Bader, Mohammed Khaled I., Hassan, Taufiq, Ariff, Mohamed
Format: Conference or Workshop Item
Language:English
Published: 2008
Online Access:http://psasir.upm.edu.my/id/eprint/8853/
http://works.bepress.com/cgi/viewcontent.cgi?article=1029&context=mohamed_ariff
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spelling my.upm.eprints.88532010-12-23T04:36:24Z http://psasir.upm.edu.my/id/eprint/8853/ Cost, revenue, and profit efficiency of Islamic versus conventional banks: international evidence using data envelopment analysis Shamsher, Mohamad Bader, Mohammed Khaled I. Hassan, Taufiq Ariff, Mohamed This paper measures and compares the cost, revenue, and profit efficiency of 43 Islamic and 37 conventional banks over the period 1990-2005 in 21 countries using Data Envelopment Analysis. 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 revenue 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. However, geographical location explains the significant differences in revenue and profit efficiency between both streams of banks. Overall, the results are in favour of the more recent Islamic banking system. 2008-07-06 Conference or Workshop Item NonPeerReviewed Shamsher, Mohamad and Bader, Mohammed Khaled I. and Hassan, Taufiq and Ariff, Mohamed (2008) Cost, revenue, and profit efficiency of Islamic versus conventional banks: international evidence using data envelopment analysis. In: Asian, FA-NFA 2008 International Conference, 6-9 July 2008, Yokohama, Japan. (pp. 1-24). http://works.bepress.com/cgi/viewcontent.cgi?article=1029&context=mohamed_ariff English
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description This paper measures and compares the cost, revenue, and profit efficiency of 43 Islamic and 37 conventional banks over the period 1990-2005 in 21 countries using Data Envelopment Analysis. 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 revenue 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. However, geographical location explains the significant differences in revenue and profit efficiency between both streams of banks. Overall, the results are in favour of the more recent Islamic banking system.
format Conference or Workshop Item
author Shamsher, Mohamad
Bader, Mohammed Khaled I.
Hassan, Taufiq
Ariff, Mohamed
spellingShingle Shamsher, Mohamad
Bader, Mohammed Khaled I.
Hassan, Taufiq
Ariff, Mohamed
Cost, revenue, and profit efficiency of Islamic versus conventional banks: international evidence using data envelopment analysis
author_facet Shamsher, Mohamad
Bader, Mohammed Khaled I.
Hassan, Taufiq
Ariff, Mohamed
author_sort Shamsher, Mohamad
title Cost, revenue, and profit efficiency of Islamic versus conventional banks: international evidence using data envelopment analysis
title_short Cost, revenue, and profit efficiency of Islamic versus conventional banks: international evidence using data envelopment analysis
title_full Cost, revenue, and profit efficiency of Islamic versus conventional banks: international evidence using data envelopment analysis
title_fullStr Cost, revenue, and profit efficiency of Islamic versus conventional banks: international evidence using data envelopment analysis
title_full_unstemmed Cost, revenue, and profit efficiency of Islamic versus conventional banks: international evidence using data envelopment analysis
title_sort cost, revenue, and profit efficiency of islamic versus conventional banks: international evidence using data envelopment analysis
publishDate 2008
url http://psasir.upm.edu.my/id/eprint/8853/
http://works.bepress.com/cgi/viewcontent.cgi?article=1029&context=mohamed_ariff
_version_ 1643824140112625664
score 13.211869

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