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Financial stability efficiency of Islamic and conventional banks

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  • Safiullah, Md

Abstract

We examine the financial stability efficiency of Islamic and conventional banks. We employ a meta-frontier stability function approach based on stochastic frontier framework to estimate financial stability efficiency of both bank groups, drawing on a sample of Islamic and conventional banks from 28 countries over the period 2003–2018. Our study result shows that Islamic banks have 5.30% higher stability efficiency compared to conventional banks. This result is robust when we examine country-wise and geographical region-wise stability efficiency of Islamic and conventional banks.

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  • Safiullah, Md, 2021. "Financial stability efficiency of Islamic and conventional banks," Pacific-Basin Finance Journal, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:pacfin:v:68:y:2021:i:c:s0927538x21000949
    DOI: 10.1016/j.pacfin.2021.101587
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    6. Isnurhadi & Sulastri & Yulia Saftiana & Ferry Jie, 2022. "Banking Industry Sustainable Growth Rate under Risk: Empirical Study of the Banking Industry in ASEAN Countries," Sustainability, MDPI, vol. 15(1), pages 1-21, December.

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    More about this item

    Keywords

    Financial stability efficiency; Islamic banking; Stochastic meta-frontier;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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