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Profitability determinants of Islamic and conventional banks in Malaysia: a panel regression approach

Abduh, Muhamad and Omar, Mohd. Azmi and Mesic, Edina (2012) Profitability determinants of Islamic and conventional banks in Malaysia: a panel regression approach. In: Terengganu International Business and Economics Conference 2012 (TIBEC III), 18-20 October 2012, Primula Beach Hotel, Kuala Terengganu.

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Abstract

This paper examines the impact of bank-specific and macroeconomic factors upon the profitability performance of Islamic and conventional banks in Malaysia using panel data regression analysis. The sample comprises of seventeen conventional banks and thirteen Islamic banks covering the period of 2005-2009. The results show that liquidity ratios and macroeconomic condition are the profitability determinant under pooled OLS framework, while only liquidity ratio is significantly affecting profitability under random effects model. However, final result under fixed effects model shows that types of bank and macroeconomic condition are the significant determinants of bank profitability. This study also evidences that Islamic banks are more profitable than conventional banks during the period analyzed.

Item Type: Conference or Workshop Item (Full Paper)
Additional Information: 6777/26230
Uncontrolled Keywords: Profitability, panel regression analysis, Islamic banks, Malaysia
Subjects: B Philosophy. Psychology. Religion > BP Islam. Bahaism. Theosophy, etc > BP1 Islam > BP173.75 Islam and economics
H Social Sciences > HG Finance > HG1501 Banking
Kulliyyahs/Centres/Divisions/Institutes: Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Dr Muhamad Abduh
Date Deposited: 25 Oct 2012 09:18
Last Modified: 23 Nov 2013 11:58
URI: http://irep.iium.edu.my/id/eprint/26230

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