Technical efficiency of Islamic and conventional banks with undesirable output: evidence from a stochastic meta-frontier directional distance function

Title: Technical efficiency of Islamic and conventional banks with undesirable output: evidence from a stochastic meta-frontier directional distance function
Creator: Safiullah, Md; Shamsuddin, Abul
Relation: Global Finance Journal Vol. 51, Issue February 2022, no. 100547
Publisher Link: http://dx.doi.org/10.1016/j.gfj.2020.100547
Publisher: Elsevier
Resource Type: journal article
Date: 2022
Description: We examine technical efficiency of Islamic and conventional banks. We contribute to the literature by applying a stochastic meta-frontier directional distance function model with undesirable output, which helps to overcome misestimating technical efficiency. For a sample of banks from 28 countries, we find that a typical Islamic bank is less technically efficient compared to its conventional counterpart. This is due to Islamic banks using less advanced technology compared to conventional banks rather than group-specific technical inefficiency. The findings are robust across six geographical regions of the world.
Subject: technical inefficiency; Islamic banking; undesirable output; stochastic meta-frontier; directional distance function
Identifier: http://hdl.handle.net/1959.13/1449249
Identifier: uon:43610
Identifier: ISSN:1044-0283
Language: eng
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