Evaluation of Islamic banking performance: On the current use of econometric models
AbstractThis paper provides an appraisal of some of the researches conducted in recent years for evaluating the efficiency of Islamic banks. It is restricted to studies using parametric (SFA) and non-parametric (DEA) models. It finds that they leave much to be desired and the conclusions they arrive at are of suspect validity for a variety of reasons. On a more important side, the criteria – cost or profit – they invariably use for measuring efficiency albeit valid miss the essence of what Islamic banking aims to achieve. These banks must of course pay their way but more than that they have to meet certain social objectives and priorities. The fulfillment of social responsibilities even at the expense of reduced profits has to be the main justification for their existence.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 6461.
Date of creation: 2005
Date of revision:
Publication status: Published in Sixth International Conference on Islamic Economics and Finance in the 21st Century, November 2005 Papers and comments published by the organizers of the Conference, Jakarta.1(2005): pp. 229-248
Islamic banking; Efficiency criteria; SFA; DEA; Scial priorities;
Find related papers by JEL classification:
- G2 - Financial Economics - - Financial Institutions and Services
- G0 - Financial Economics - - General
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