Abstract

Using non-parametric data envelopment analysis (DEA), this paper examines the efficiency of Islamic banks and conventional banks operating in some North African countries in terms of cost, revenue, profit, and super efficiency during the period from 2000 to 2011. While a comparison of the cost-efficiency results of both groups of banks at country level showed closeness to each other, conventional banks had the advantage of less cost-inefficiency by the end of 2011, compared to Islamic banks. Revenue efficiency results strengthen the superiority of conventional banks over Islamic banks in this region. Super efficiency results similar to those of cost efficiency are indicated, meaning that conventional banks are not only more efficient in pricing their inputs, but also in determining the volume of their inputs. Generally, the findings showed that Islamic banks perform better in mixed banking systems rather than in pure Islamic systems.

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