A Comparison of Leverage and Profitability of Islamic and Conventional Banks
21 Pages Posted: 12 May 2011 Last revised: 29 Apr 2016
Date Written: May 1, 2011
The aim of this research is to determine empirically differences between Islamic and conventional banks with particular focus on their financial characteristics such as leverage and profitability. Our sample is made of Islamic and conventional banks, resulting in a panel of 545 observations with 250 of these observations being for Islamic banks, from 18 countries over the period 2004-2008. We run t-test of equality of means, a binary logistic regression and a discriminant analysis using leverage and profitability ratios and their determinants. Results provide broad evidence on differences in leverage and profitability across conventional and conventional banks.
Keywords: Islamic banks, profitability, leverage
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