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Performance of islamic banks across the world: an empirical analysis over the period 2001-2008

By Sandrine Kablan and Ouidad Yousfi


Our study aims at analyzing Islamic bank efficiency over the period 2001-2008. We found that they were efficient at 92%. The level of efficiency could however vary according to the region where they operate. Asia displays the highest score with 96%. Indeed, country like Malaysia made reforms in order to allow these banks to better cope with the existing financial system, display the highest scores. On the contrary countries with Islamic banking system do not necessarily display efficiency scores superior to the average. The subprime crisis seems to have impacted those banks indirectly. And market power and profitability have a positive impact on Islamic banks efficiency, while it is the contrary for their size. The latter implies that they do not benefit from scale economy, may be because of the specificity of Islamic financial products.

Topics: C23 - Models with Panel Data; Longitudinal Data; Spatial Time Series, G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill, G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Year: 2011
OAI identifier: oai:mpra.ub.uni-muenchen.de:28695

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