State ownership and bank performance: conventional vs Islamic banks
Journal of Islamic Accounting and Business Research
ISSN: 1759-0817
Article publication date: 18 October 2021
Issue publication date: 3 January 2022
Abstract
Purpose
This paper aims to examine the effect of state ownership on bank performance for all banks in the Gulf Cooperation Council (GCC) countries during the period 2003 – 2018, for two distinct banking systems: the conventional and the Islamic banking systems.
Design/methodology/approach
To achieve the goal of the study, this paper uses a mean t-test to examine the mean difference of the related variables for both banking systems, and a regression test (using the GMM method) to explore the effect of state ownership on bank performance.
Findings
The most important result of the analysis is that state ownership has a significantly positive influence on bank performance for conventional banks but not for Islamic banks, in the GCC area.
Originality/value
This study adds to the scarce related literature comparative empirical results with respect to the impact of ownership on the performance of two different banking systems: the conventional system and the Islamic banking system in the GCC area. This study is likely to have implications for policymakers in terms of developing rules relevant to the governance of GCC’s two banking systems that can help to support the stability of the whole banking sector.
Keywords
Citation
Alshammari, T. (2022), "State ownership and bank performance: conventional vs Islamic banks", Journal of Islamic Accounting and Business Research, Vol. 13 No. 1, pp. 141-156. https://doi.org/10.1108/JIABR-06-2021-0161
Publisher
:Emerald Publishing Limited
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