BANKS EFFICIENCY, OWNERSHIP TYPE AND LISTING STATUS IN GULF COOPERATION COUNCIL COUNTRIES: A CROSS-COUNTRIES ANALYSIS

Abstract

Using data from 2005-2013, this paper analyzes banks efficiency across the GCC countries. This study examines the efficiency of GCC conventional and Islamic banks across the GCC countries while considering the impact of ownership type and listing status on banks efficiency by employing the Data Envelopment Analysis (DEA) and a second stage Tobit regression analysis with bootstrapping. It is found that GCC conventional banks are by far more efficient than GCC Islamic banks and this conclusion holds across all GCC countries. It is also found that GCC state-owned banks outperform the GCC private-owned banks in general and across all GCC countries; and interestingly, GCC listed banks were less efficient than GCC unlisted banks. More, the main source of inefficiency in GCC banks was the scale inefficiency and GCC banks exhibited a decreasing return to scale. Therefore, GCC policymakers and regulators should not support any expansionary strategy in their banking industry.