Abstract
The purpose of this study is to analyze the Technical Efficiency
(TE) of Islamic banks and conventional banks in Pakistan by using Data
Envelopment Test (DEA). We also used TOBIT analysis to identify the
determinants of efficiency in the banking industry. Twenty banks have been
selected from the banking industry, from which ten banks are Islamic banks
or banks which have Islamic branches, and ten banks are conventional banks.
Panel data are used for the period 2007-2015. Overall, it is concluded
that conventional banks are technically more efficient than Islamic banks.
Accordingly, the censored TOBIT regression indicates that the ownership,
liquidity, bank size, and capital adequacy ratios are the main determinants of
overall TE for the banks.
Kashif Hamid, Muhammad Usman Khurram. (2017) Comparative Analysis of Technical Efficiency for Islamic versus Conventional Banks and its Determinants in Pakistan, Journal of Islamic Business and Management, Volume 7, Issue 2.
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