1- Azad Islamic university
2- Azad Islamic university ,mostafa.rajabi@gmail.com
3- Isfahan University
4- isfahan university
2- Azad Islamic university ,
3- Isfahan University
4- isfahan university
Abstract: (205 Views)
In Islamic and conventional banks, there may always be differences in efficiency, cost gap ratio and credit risk; Therefore, the purpose of this study was to investigate the relationship between credit risk, cost gap ratio and efficiency of banks in selected Islamic and conventional countries. For this purpose, credit risk, efficiency and cost gap ratio were calculated for 50 Islamic banks and 50 non-Islamic (conventional) banks during the years 2013-2019 and regard, the results of the t-test showed that the credit risk, inefficiency and cost gap ratio are higher in Islamic banks than conventional banks. Also, the results of the Granger causality test showed that there is a bidirectional causality relationship between inefficiency and credit risk. But this relationship is a little weak. There is no causal relationship between credit risk and cost gap ratio, and there is a strong two-way causality relationship between inefficiency and cost gap ratio. The results in Islamic banks are almost similar to all banks. However, in Islamic banks, credit risk is not the Grangerian cause of inefficiency. Also, the significance level of other causal relationships is much higher. For conventional banks, there is no causal relationship between inefficiency and credit risk. There is no causal relationship between credit risk and cost gap ratio, and there is a two-way causality relationship between inefficiency and cost gap ratio. In addition, the results of variance analysis indicate that the cost gap and inefficiency have a close relationship with each other and their effectiveness is high. Credit risk also has a more or less effect on inefficiency during future periods. In Islamic banks, the effects of inefficiency and cost gap on credit risk are slightly higher. But the inefficiency of the cost gap has a high effectiveness. In conventional banks, credit risk has the same effectiveness as Islamic banks, but its effectiveness is somewhat less. Also, inefficiency has less effects than the cost gap. The cost gap, like Islamic banks, has a high effectiveness of inefficiency, and this effectiveness decreases over time.
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