IDEAS home Printed from
   My bibliography  Save this article

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


  • Abdus Samad


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

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    1. Bergmann, Barbara R, 1971. "The Effect on White Incomes of Discrimination in Employment," Journal of Political Economy, University of Chicago Press, vol. 79(2), pages 294-313, March-Apr.
    2. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
    3. Elaine Sorensen, 1993. "Continuous Female Workers: How Different Are They from Other Women?," Eastern Economic Journal, Eastern Economic Association, vol. 19(1), pages 15-32, Winter.
    4. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162.
    5. Blau, Francine D & Kahn, Lawrence M, 1992. "The Gender Earnings Gap: Learning from International Comparisons," American Economic Review, American Economic Association, vol. 82(2), pages 533-538, May.
    6. Polachek,Solomon W. & Siebert,W. Stanley, 1993. "The Economics of Earnings," Cambridge Books, Cambridge University Press, number 9780521367288, March.
    7. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    8. Joni Hersch, 1991. "Male-Female Differences in Hourly Wages: The Role of Human Capital, Working Conditions, and Housework," ILR Review, Cornell University, ILR School, vol. 44(4), pages 746-759, July.
    9. Greenhalgh, Christine A, 1980. "Male-Female Wage Differentials in Great Britain: Is Marriage an Equal Opportunity?," Economic Journal, Royal Economic Society, vol. 90(363), pages 751-775, December.
    10. Dora L. Costa & Matthew E. Kahn, 2008. "Learning from the Past," NBER Chapters,in: Heroes and Cowards: The Social Face of War National Bureau of Economic Research, Inc.
    11. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    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. Ahmet F. Aysan & Mustafa Disli & Huseyin Ozturk, 2017. "Bank Lending Channel In A Dual Banking System:Why Are Islamic Banks So Responsive?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 17/938, Ghent University, Faculty of Economics and Business Administration.
    3. Ahmet F. Aysan & Mustafa Disli & Meryem Duygun & Huseyin Ozturk, 2017. "Religiosity Versus Rationality: Depositor Behavior In Islamic And Conventional Banks," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 17/933, Ghent University, Faculty of Economics and Business Administration.
    4. 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.
    5. 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.

    More about this item


    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


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ije:journl:v:7:y:1999:i:2:p:1-26. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gairuzazmi Mat Ghani). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.