Cost-efficiency and financial and geographical characteristics of banking sectors in the MENA countries. Issue 35 (27th July 2017)

• Record Type: Journal Article
• Authors: Al-Jarrah, Idries M.; Al-Abdulqader, Khalid S.; Hammoudeh, Shawkat
• Is Part Of: Applied economics. Volume 49:Issue 35(2017)
• Page Start: 3523
• Page End: 3537
• Publication Date: 2017-07-27
• Subjects: Cost-efficiency -- translog functional form -- stochastic frontier -- intermediation approach -- panel data; E59 -- G01 -- G18 -- G20 -- G21 -- G28 -- G32; Economics -- Periodicals; 330
• DOI: 10.1080/00036846.2016.1262524
• Languages: English
• ISSNs: 0003-6846

Abstract

ABSTRACT: We utilize the translog stochastic frontier model to estimate the cost-efficiency levels for conventional and Islamic, Cooperation Council (GCC) and non-GCC banks in the Middle East and North African (MENA) countries. The estimated cost-efficiency averages around 77% for those MENA banks, but with slight changes in this score for the individual countries. The results also show that the banks in the GCC countries are the most efficient in the region and the efficiency scores for the conventional and Islamic banks are similar. Finally, the recent financial crisis seems to have a slight impact on the observed efficiency scores of those banks.