BANK-SPECIFIC CHARACTERISTICS, MACROECONOMIC FACTORS AND GLOBALISATION ON ISLAMIC AND CONVENTIONAL BANK TOTAL FACTOR PRODUCTIVITY

W. JUBILEE, RIBED VIANNECA (2021) BANK-SPECIFIC CHARACTERISTICS, MACROECONOMIC FACTORS AND GLOBALISATION ON ISLAMIC AND CONVENTIONAL BANK TOTAL FACTOR PRODUCTIVITY. Doctoral thesis, Universiti Putra Malaysia.

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Abstract

This study evaluates the difference between Islamic and conventional bank productivity. Previous studies on bank productivity tended to focus on conventional banks, with limited studies targeting Islamic banks. Therefore, the present study aims to close this gap in the literature by investigating the productivity of Islamic and conventional banks. This study also provides a fresh perspective and outlook on the influence of bank-specific characteristics, macroeconomic factors and globalisation on the productivity of Islamic and conventional banks in the context of the Middle East (ME), Southeast Asia (SEA), and South Asia (SA) regions. To meet their goals and objectives, banks should understand the potential determinants that may affect their productivity, including bank-specific determinants (internal) and macroeconomic (external) factors that have been said to influence the level of productivity, particularly in Islamic and conventional banks. Furthermore, globalisation is one of the mechanisms that could greatly enhance bank productivity levels. However, limited studies have examined the effects of bank-specific determinants, macroeconomic factors and globalisation on the productivity of banks. The sample comprised of 385 banks (66 Islamic Banks and 319 Conventional Banks) from 18 countries with data examined between 2008 and 2017. Panel data techniques with Data Envelopment analysis (DEA) based Malmquist Productivity Index (MPI) were employed to investigate the impact of selected, if not important factors and bank productivity indicated by Total Factor Productivity Changes (TFPCH). After obtaining the productivity index from the DEA-based MPI frontier, a panel regression analysis was conducted. A two-stage analysis was carried out using Multiple Panel Regression Analysis (MPRA) that consisted of the Pooled Ordinary Least Square (POLS), Fixed Effect Model (FEM), Random Effect Model (REM) and Generalised Method of Moments (GMM) methods. Based on the analysis and subsequent results, it was revealed that Islamic banks tend to be more progressive compared to conventional iii banks but insignificantly different. The panel regression model results also showed that bank-specific variables and macroeconomic variables were significant determinants to the productivity of banks. Also discovered, was that the size of the bank has a positive impact on both types of banks. Moreover, credit risk has a negative impact on both types of banks total factor productivity change (TFPCH). At the same time, capitalisation and liquidity were shown to be positively correlated with conventional banks’ TFPCH. Similarly, overhead (OH) expenses and the impact of the global financial crisis (GFC) revealed a contrary finding. The results also suggest that, in general, globalisation dimensions, such as trade, financial, interpersonal, and cultural globalisation have a positive association on Islamic banks’ TFPCH. This study also revealed that the levels of TFPCH in Islamic and conventional banks are not merely affected by bank-specific determinants and macroeconomic factors but are also affected by the effects of globalisation variables. The main benefit of this work will provide further insight and complement existing studies and the body of literature and knowledge on the bank productivity of Islamic and conventional banks which are important to the banks, regulations, investors, and researchers.

Item Type:	Thesis (Doctoral)
Subjects:	Social Sciences > Finance
Depositing User:	ENCIK SAIFUL FADZLY JAMALUDIN
Date Deposited:	08 Jul 2026 13:18
Last Modified:	08 Jul 2026 13:18
URI:	https://repositori.mohe.gov.my/id/eprint/321

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