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Measuring efficiency convergence in Islamic and conventional banks: Cross-country evidence

Johnes, Jill, Izzeldin, Marwan, Pappas, Vasileios and Tsionas, Mike (2017) Measuring efficiency convergence in Islamic and conventional banks: Cross-country evidence. In: Lancaster University Management School Productivity Centre Seminar, 9th January 2017, Lancaster University Management School. (Unpublished)

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This paper compares efficiency dynamics (steady state and convergence) between Islamic and conventional banks using parametric (stochastic frontier analysis) and non-parametric (classification trees) methods. Analysis is based on an unbalanced panel of Islamic and conventional banks from 23 countries over the period 1999 to 2014. We specify a β-convergence model with bank type shift (steady state efficiency) and slope dummies (efficiency convergence). Speed of convergence and steady state efficiency of the two types of banks are found to be similar in the initial parametric analysis. A classification trees framework is adopted to identify banking ‘clubs’ with respect to estimated efficiency steady states and convergence rates. This reveals variations between countries in terms of the convergence and steady states of the two types of banks: in some countries the two banking sectors have distinct models, while in others they do not.

Item Type: Conference or Workshop Item (Lecture)
Subjects: H Social Sciences > HG Finance
Schools: Huddersfield Business School > Quantitative Analysis Research Group
Huddersfield Business School
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Depositing User: Jill Johnes
Date Deposited: 19 Jan 2017 10:02
Last Modified: 28 Aug 2021 16:21


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