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

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  • Talla Aldeehani

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.

Suggested Citation

  • Talla Aldeehani, 2018. "Efficiency and client satisfaction of Islamic and conventional banks: A bilateral effect," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(2), pages 282-299, April.
    • Handle: RePEc:pdc:jrnbeh:v:14:y:2018:i:2:p:282-299
    DOI: 10.15208/beh.2018.22
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    References listed on IDEAS

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    1. Vijay M. KUMBHAR, 2011. "Factors Affecting On Customers’ Satisfaction In E-Banking: Some Evidences Form Indian Banks," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 3(4), pages 1-14, December.
    2. Syed Ali Raza & Syed Tehseen Jawaid & Ayesha Hassan, 2015. "Internet banking and customer satisfaction in Pakistan," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 7(1), pages 24-36, February.
    3. Abdelghani Echchabi & Oladokun Nafiu Olaniyi, 2012. "Malaysian consumers' preferences for Islamic banking attributes," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 39(11), pages 859-874, September.
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    1. Igor Fellype Loureiro Valenca Filgueiras & Fagner José Coutinho de Melo & Djalma Silva Guimaraes Junior & Aline Amaral Leal Barbosa & Eryka Fernanda Miranda Sobral & Silvio André Vital Junior, 2024. "Evaluation of the Benefits Generated by Sustainability 4.0: A Study of the Perception of Banking Sector Customers," Sustainability, MDPI, vol. 16(6), pages 1-26, March.

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    More about this item

    Keywords

    Bank efficiency; Islamic banks; customer satisfaction bilateral effects;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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