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Comparative Efficiency Of The Islamic Bank Vis-A-Vis Conventional Banks In Malaysia

Author

Listed:
  • Abdus Samad

Abstract

This paper is an empirical study determining the relative efficiency position of the Islamic bank of Malaysia, i.e., Bank Islam Malaysia Berhad (BIMB) and conventional banks of Malaysia during 1992-1996. The paper examines productive and managerial efficiency in the sources and the uses of banks' funds. The weighted ratio approach has been adopted in measuring various types of efficiencies of the banks. The measures of managerial test indicate that the managerial efficiency of the conventional banks is higher than that of the Islamic bank. ANOVA supports our results as the null hypothesis of the equality of means of the two systems is rejected at 5 percent level of significance. The measures of productivity efficiency test, however, show mixed results. The paper is structured as follows: section 1 provides the introduction, objective, methodology and the rationale of this study; section 2 reviews the literature; section 3 defines banking efficiency and develops the analytical tool for measuring efficiency; and section 4 provides empirical evidence and analysis. Conclusions and the scope for future study are presented in section 5.

Suggested Citation

  • Abdus Samad, 1999. "Comparative Efficiency Of The Islamic Bank Vis-A-Vis Conventional Banks In Malaysia," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 7(1), pages 1-27, June.
  • Handle: RePEc:ije:journl:v:7:y:1999:i:2:p:1-26
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    Citations

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    Cited by:

    1. Sakarya, Burchan & Kaya, Yasemin, 2013. "Katılım Bankaları Mevduat Bankalarından Farklı mı Çalışıyor
      [Performance Differentiation Between Participation (Islamic) Banks and Deposit Banks in Turkey]
      ," MPRA Paper 69196, University Library of Munich, Germany.
    2. repec:eee:jcecon:v:46:y:2018:i:1:p:1-19 is not listed on IDEAS
    3. Ahmet F. Aysan & Mustafa Disli & Huseyin Ozturk, 2018. "Bank lending channel in a dual banking system: Why are Islamic banks so responsive?," The World Economy, Wiley Blackwell, vol. 41(3), pages 674-698, March.
    4. Aysan, Ahmet F. & Disli, Mustafa & Duygun, Meryem & Ozturk, Huseyin, 2018. "Religiosity versus rationality: Depositor behavior in Islamic and conventional banks," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 1-19.
    5. repec:eee:riibaf:v:48:y:2019:i:c:p:17-31 is not listed on IDEAS
    6. repec:hur:ijarbs:v:8:y:2018:i:4:p:1185-1197 is not listed on IDEAS
    7. repec:asi:aeafrj:2019:p:559-580 is not listed on IDEAS
    8. Aysen ALTUN ADA & Nilufer DALKILIC, 2014. "Efficiency Analysis in Islamic Banks: A Study for Malaysia and Turkey," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 8(1), pages 9-33.
    9. Sirajo Aliyu & Rosylin Mohd Yusof, 2016. "Profitability and Cost Efficiency of Islamic Banks: A Panel Analysis of Some Selected Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1736-1743.
    10. repec:eco:journ1:2019-05-16 is not listed on IDEAS
    11. repec:mbr:jmonec:v:6:y:2012:i:4:p:133-166 is not listed on IDEAS

    More about this item

    Keywords

    Islamic Economics Journal: IIUM Journal of Economics and Management;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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