The Efficiency of Islamic Banks: Empirical Evidence from the Mena and Asian Countries Islamic Banking Sectors
University of Malaya (UM)
Muhamed Zulkhibri Abdul Majid
Central Bank of Malaysia; University of Nottingham
June 1, 2008
Middle East Business and Economic Review, Vol.20, No.1, June 2008
The paper investigates the efficiency of the Islamic banking sectors in 16 MENA and Asian countries during the period of 2001-2006. The efficiency estimates of individual banks are evaluated using the non-parametric Data Envelopment Analysis (DEA) method. The results suggest that the MENA Islamic banks have exhibited higher mean technical efficiency relative to their Asian Islamic bank counterparts.with pure technical inefficiency outweighs scale inefficiency in both the MENA and Asian countries banking sectors. The empirical findings also indicate that banks from the MENA region were the most efficient banks by dominating the top part of efficiency frontier over the period.
Keywords: Islamic Banks, Data Envelopment Analysis, DEA
JEL Classification: G21, G28Accepted Paper Series
Date posted: December 8, 2009
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