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AuthorAli Salman, Saleh
AuthorMoradi-Motlagh, Amir
AuthorZeitun, Rami
Available date2023-02-27T08:54:52Z
Publication Date2020-04
Publication NamePacific-Basin Finance Journal
Identifierhttp://dx.doi.org/10.1016/j.pacfin.2020.101266
CitationSaleh, A. S., Moradi-Motlagh, A., & Zeitun, R. (2020). What are the drivers of inefficiency in the Gulf Cooperation Council banking industry? A comparison between conventional and Islamic banks. Pacific-Basin Finance Journal, 60, 101266.
ISSN0927-538X
URIhttps://www.sciencedirect.com/science/article/pii/S0927538X19302835
URIhttp://hdl.handle.net/10576/40456
AbstractThis paper analyses the efficiency and productivity of the Gulf Cooperation Council (GCC) banks using an innovative nonparametric methodology that not only considers undesirable outputs but also determines the contribution of individual input and output variables in total inefficiency. We investigate the impact of incorporating non-performing loans (NPLs) on the performance of banks in our sample. We also adopt the innovative Malmquist-Luenburger productivity index to analyse the changes in productivity based on the weighted Russell directional distance model (WRDDM). The results show that the main source of inefficiency is securities followed by NPLs and fixed assets, respectively. In addition, this paper investigates the differences and sources of inefficiency between Islamic and non-Islamic banks. Our results show that during the global financial crisis in 2008–2009 GCC banks experienced productivity decline. We also show that the difference in inefficiency between Islamic and commercial banks has significantly narrowed and that Islamic banks have been able to catch up and lessen the gap with commercial banks over the study period.
SponsorThis research has been funded by Qatar University grant number QUUG-CBE-DFE-14/15-6 .
Languageen
PublisherElsevier
SubjectBanks
GCC
Efficiency
Productivity
DEA
Undesirable output
TitleWhat are the drivers of inefficiency in the Gulf Cooperation Council banking industry? A comparison between conventional and Islamic banks
TypeArticle
Volume Number60
dc.accessType Abstract Only


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