Portfolio behaviour of Islamic banks; case studies for: Pakistan, 1974-1994 and Iran, 1984-1994 (Ph.D. Thesis)

This thesis investigates the behavior of Pakistani and Iranian banks following the introduction of Islamic Banking. This thesis contains static and dynamic models that have been developed to evaluate the semi-annually (1974-1994) and quarterly (1984-1994) changes in the behavior of both the Pakistani and Iranian banks. Several hypotheses regarding the behavior of Islamic banks are evaluated, including testing the validity of the theoretical restrictions, symmetry and homogeneity, together with conjunction of homogeneity and symmetry on the structure of the matrix of coefficients on the yield on assets and liabilities. The thesis also tests the hypothesis that there is temporal independence in the disturbance vector associated with the forces that determine the banks' portfolio allocations. Furthermore, the response over time of the choice assets to alterations in the set of exogenous variables is examined.