The Efficiency Patterns of Islamic Banks During the Global Financial Crisis: The Case of Bangladesh

Mette Asmild, Dorte Kronborg, Tasmina Mahbub, Kent Matthews

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

The Global Financial Crisis (GFC) has refocussed attention on Islamic banking as an alternative business model for banking. Studies of the performance of Islamic banks during the Global Financial Crisis have typically used one-step or two-step methods based on Data Envelopment Analysis (DEA) with mixed results. But such techniques are limited by the inability to identify the nature and structure of the inefficiencies with respect to the improvement potentials on different variables. In this paper we apply Multi-directional Efficiency Analysis (MEA) which facilitates an understanding of the differences in inefficiency patterns for a set of banks in Bangladesh from 2001 to 2015. We confirm the consensus finding that Islamic banks outperformed conventional commercial banks during the GFC period but additionally identify differences in inefficiency from specific variables. Such information can provide important insights to managers and regulators.
Original languageEnglish
JournalThe Quarterly Review of Economics and Finance
Volume74
Pages (from-to)67-74
Number of pages8
ISSN1062-9769
DOIs
Publication statusPublished - 2019

Bibliographical note

Published online: 12. April 2018

Keywords

  • Islamic banks
  • Multi-directional Efficiency Analysis (MEA)
  • Bangladesh

Cite this

@article{0a6f87f709a34f458365e335a86de07a,
title = "The Efficiency Patterns of Islamic Banks During the Global Financial Crisis: The Case of Bangladesh",
abstract = "The Global Financial Crisis (GFC) has refocussed attention on Islamic banking as an alternative business model for banking. Studies of the performance of Islamic banks during the Global Financial Crisis have typically used one-step or two-step methods based on Data Envelopment Analysis (DEA) with mixed results. But such techniques are limited by the inability to identify the nature and structure of the inefficiencies with respect to the improvement potentials on different variables. In this paper we apply Multi-directional Efficiency Analysis (MEA) which facilitates an understanding of the differences in inefficiency patterns for a set of banks in Bangladesh from 2001 to 2015. We confirm the consensus finding that Islamic banks outperformed conventional commercial banks during the GFC period but additionally identify differences in inefficiency from specific variables. Such information can provide important insights to managers and regulators.",
keywords = "Islamic banks, Multi-directional Efficiency Analysis (MEA), Bangladesh, Islamic banks, Multi-directional Efficiency Analysis (MEA), Bangladesh",
author = "Mette Asmild and Dorte Kronborg and Tasmina Mahbub and Kent Matthews",
note = "Published online: 12. April 2018",
year = "2019",
doi = "10.1016/j.qref.2018.04.004",
language = "English",
volume = "74",
pages = "67--74",
journal = "The Quarterly Review of Economics and Finance",
issn = "1062-9769",
publisher = "Elsevier",

}

The Efficiency Patterns of Islamic Banks During the Global Financial Crisis : The Case of Bangladesh. / Asmild, Mette; Kronborg, Dorte; Mahbub, Tasmina; Matthews, Kent.

In: The Quarterly Review of Economics and Finance, Vol. 74, 2019, p. 67-74.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

T1 - The Efficiency Patterns of Islamic Banks During the Global Financial Crisis

T2 - The Case of Bangladesh

AU - Asmild, Mette

AU - Kronborg, Dorte

AU - Mahbub, Tasmina

AU - Matthews, Kent

N1 - Published online: 12. April 2018

PY - 2019

Y1 - 2019

N2 - The Global Financial Crisis (GFC) has refocussed attention on Islamic banking as an alternative business model for banking. Studies of the performance of Islamic banks during the Global Financial Crisis have typically used one-step or two-step methods based on Data Envelopment Analysis (DEA) with mixed results. But such techniques are limited by the inability to identify the nature and structure of the inefficiencies with respect to the improvement potentials on different variables. In this paper we apply Multi-directional Efficiency Analysis (MEA) which facilitates an understanding of the differences in inefficiency patterns for a set of banks in Bangladesh from 2001 to 2015. We confirm the consensus finding that Islamic banks outperformed conventional commercial banks during the GFC period but additionally identify differences in inefficiency from specific variables. Such information can provide important insights to managers and regulators.

AB - The Global Financial Crisis (GFC) has refocussed attention on Islamic banking as an alternative business model for banking. Studies of the performance of Islamic banks during the Global Financial Crisis have typically used one-step or two-step methods based on Data Envelopment Analysis (DEA) with mixed results. But such techniques are limited by the inability to identify the nature and structure of the inefficiencies with respect to the improvement potentials on different variables. In this paper we apply Multi-directional Efficiency Analysis (MEA) which facilitates an understanding of the differences in inefficiency patterns for a set of banks in Bangladesh from 2001 to 2015. We confirm the consensus finding that Islamic banks outperformed conventional commercial banks during the GFC period but additionally identify differences in inefficiency from specific variables. Such information can provide important insights to managers and regulators.

KW - Islamic banks

KW - Multi-directional Efficiency Analysis (MEA)

KW - Bangladesh

KW - Islamic banks

KW - Multi-directional Efficiency Analysis (MEA)

KW - Bangladesh

UR - https://sfx-45cbs.hosted.exlibrisgroup.com/45cbs?url_ver=Z39.88-2004&url_ctx_fmt=info:ofi/fmt:kev:mtx:ctx&ctx_enc=info:ofi/enc:UTF-8&ctx_ver=Z39.88-2004&rfr_id=info:sid/sfxit.com:azlist&sfx.ignore_date_threshold=1&rft.object_id=954921422560&rft.object_portfolio_id=&svc.holdings=yes&svc.fulltext=yes

U2 - 10.1016/j.qref.2018.04.004

DO - 10.1016/j.qref.2018.04.004

M3 - Journal article

VL - 74

SP - 67

EP - 74

JO - The Quarterly Review of Economics and Finance

JF - The Quarterly Review of Economics and Finance

SN - 1062-9769

ER -