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Measuring Efficiency of Islamic and Conventional Banks in MENA Region

Author

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  • Asma Sghaier

    (ISG Sousse (University of Sousse), Monastir, Tunisia)

  • Mahmoud Sabra

    (Al Azhar University Gaza, Gaza City, Palestine)

  • Zouhayer Mighr

    (FSEG, LARTIGE, Sfax, Tunisia)

  • Philippe Gilles

    (University of Toulon, Toulon, France)

Abstract

This study aims to measure the performance and efficiency of Islamic and conventional banks in the MENA region and its determinants. The authors use for this purpose the Data Envelopment Analysis (DEA) method and the analysis of the Stochastic Frontier Analysis (SFA) method for calculating the technical efficiency scores. The results reveal similar trends for both types of performance measurement. The banks category analysis revealed that conventional banks are more efficient than Islamic banks. Despite technological changes experienced by the banking system in the MENA region, the efficiency analysis shows that the technical inefficiency results from the pure technical inefficiency. Finally, the effectiveness of banks in the MENA region is sensitive to variables such as the crisis, deposits, capitalization and including especially variables related to business lines.

Suggested Citation

  • Asma Sghaier & Mahmoud Sabra & Zouhayer Mighr & Philippe Gilles, 2016. "Measuring Efficiency of Islamic and Conventional Banks in MENA Region," International Journal of Sustainable Economies Management (IJSEM), IGI Global, vol. 5(1), pages 29-51, January.
  • Handle: RePEc:igg:jsem00:v:5:y:2016:i:1:p:29-51
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