Assessing the bank profitability in the MENA region: A comparative analysis between conventional and Islamic bank
International Journal of Islamic and Middle Eastern Finance and Management
ISSN: 1753-8394
Article publication date: 12 August 2014
Abstract
Purpose
Which of the banking stream is relatively more profitable in Middle Eastern and North Africa (MENA) region?
Design/methodology/approach
The empirical study covers a sample of 15 conventional and 15 Islamic banks for the period 2002-2009.The authors estimate models using the generalized method of moments in system, of Blundell and Bond (1998). They exploit an up-to-date econometric technique which takes into consideration the issue of endogeneity of regressors to evaluate the comparative profitability of Islamic and conventional banks in the MENA region.
Findings
Empirical analysis results show that the determinants’ significance varies between Islamic and conventional banks. Profitability seems to be quite persistent in the MENA region reflecting a higher degree of government intervention and may signal barriers to competition.
Originality/value
The main interest is to develop a comprehensive model that integrates macroeconomic, industry-specific and bank-specific determinants. The paper makes comparison of the performance between two different banking systems in the MENA region. The authors consider a variable crisis to gain additional insights into the impacts of the financial crisis on MENA banking sector.
Keywords
Acknowledgements
The authors acknowledge the Editor Kabir Hassan and the three anonymous reviewers of the International Journal of Islamic and Middle Eastern Finance and Management for useful comments.
Citation
Ben Selma Mokni, R. and Rachdi, H. (2014), "Assessing the bank profitability in the MENA region: A comparative analysis between conventional and Islamic bank", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 7 No. 3, pp. 305-332. https://doi.org/10.1108/IMEFM-03-2013-0031
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited