Examining Efficiency of Islamic and Conventional Banks in Pakistan: Using Data Envelopment Analysis
Keywords:
Conventional banks, Data Envelopment Analysis, efficiency, Islamic banks, Ratio analysis
Abstract
This study employs two approaches to assess efficiency of Islamic and Conventional banks in Pakistan by using Ratio analysis technique and a non parametric Data Envelopment Analysis technique. This research study considers 19 banks over the period of 2007-2011. The findings reveal in both methods that conventional banks are performing better than Islamic banks. This research study differ from other studies in respect that it uses two approaches to evaluate efficiency of public, private, foreign and Islamic banks. Furthermore, efficiency under Data Envelopment Analysis is evaluated by considering input and output oriented measures while lending funds, deposits and portfolio investments are taken as an output variable while input variables are borrowed funds and capital. This study calculates technical, pure and scale efficiency.
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2013-08-26
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