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Publication Details
AFRICAN RESEARCH NEXUS
SHINING A SPOTLIGHT ON AFRICAN RESEARCH
business, management and accounting
Islamic versus conventional banks in the GCC countries: A comparative study using classification techniques
Research in International Business and Finance, Volume 33, Year 2015
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Description
This paper contributes to the empirical literature on Islamic finance by investigating the feature of Islamic and conventional banks in Gulf Cooperation Council (GCC) countries over the period 2003-2010. We use parametric and non-parametric classification models (Linear discriminant analysis, Logistic regression, Tree of classification and Neural network) to examine whether financial ratios can be used to distinguish between Islamic and conventional banks. Univariate results show that Islamic banks are, on average, more profitable, more liquid, better capitalized, and have lower credit risk than conventional banks. We also find that Islamic banks are, on average, less involved in off-balance sheet activities and have more operating leverage than their conventional peers. Results from classification models show that the two types of banks may be differentiated in terms of credit and insolvency risk, operating leverage and off-balance sheet activities, but not in terms of profitability and liquidity. More interestingly, we find that the recent global financial crisis has a negative impact on the profitability for both Islamic and conventional banks, but time shifted. Finally, results show that Logit regression obtained slightly higher classification accuracies than other models. © 2014 Elsevier B.V.
Authors & Co-Authors
Khediri, Karim Ben
France, Nanterre
Université Paris Nanterre
Saudi Arabia, Najran
Najran University
Tunisia, Tunis
University of Carthage
Charfeddine, Lanouar
Qatar, Doha
College of Business and Economics
France, Paris
Institut de Preparation a L'administration et a la Gestion
Tunisia, Gabes
Université de Gabès
Youssef, Slah Ben
Tunisia, Sfax
Fseg Sfax - Faculté Des Sciences Économiques et de Gestion de Sfax
Statistics
Citations: 179
Authors: 3
Affiliations: 7
Identifiers
Doi:
10.1016/j.ribaf.2014.07.002
ISSN:
02755319