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ARTÍCULO
TITULO

Productivity Growth in GCC Banking Industry: Conventional versus Islamic Banks

     

Resumen

This study examines the impact of financial liberalization on banking productivity growth in the Gulf Cooperation Council (GCC) countries during the period 1999-2007. Employing a non-parametric approach -Data Envelopment Analysis (DEA), productivity change has been measured by computing a Malmquist total factor productivity index and its components for two groups of banks, conventional and Islamic. Our findings indicate that during the period of deregulation, GCC banks experienced a gain in productivity change attributed mainly to technical change rather than to an increase in efficiency. We also found that the conventional banks tend to outperform Islamic banks in most productivity measures. In this paper we also investigated the determinants of bank productivity. The results show that bank size has a positive impact on productivity growth for all models, while capitalization is related negatively to efficiency change for the Islamic banks. Finally, the regression findings also demonstrate strong links of macroeconomic and financial sector indicators with bank productivity.  Keywords: Banking, Productivity change, Malmquist Productivity Index, Islamic banks, Data Envelopment Analysis, GCC countries.