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COMPARATIVE TFP GROWTH BETWEEN GCC CONVENTIONAL AND ISLAMIC BANKS BEFORE AND AFTER THE 2008 FINANCIAL CRISIS

AZZEDDINE AZZAM

https://orcid.org/0000-0001-7086-5892

Department of Agricultural Economics, University of Nebraska-Lincoln, 103E Filley Hall, Lincoln, Nebraska, USA

E-mail Address: azzam1@unl.edu

Corresponding author.

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and

BELAID RETTAB

Dubai Chamber, Dubai, UAE

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https://doi.org/10.1142/S0217590820420047Cited by:3 (Source: Crossref)

This article is part of the issue:

Special Issue on Islamic Economics and Finance
Guest Editor: M. Kabir Hassan, University of New Orleans, New Orleans, USA

Abstract

This paper measures and compares the performance of GCC conventional and Islamic banks in terms of total factor productivity growth (TFPG) before and after the 2008 financial crisis. The sources of TFPG are technical change, size economies, and observed asset growth. Technical change and size economies are measured by estimating a translog cost function and factor share equations. Results show that Islamic banks outperformed conventional banks overall and across different sizes. To the extent that product and process innovation improves TFPG, Islamic banks have weathered the 2008 financial crisis by being more innovative than conventional banks.

Keywords:

JEL: G21, D24

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