The Relationship Between Islamic Bank Efficiency and Stock Market Performance: Evidence From GCC Countries
Using data envelopment analysis (DEA), this paper estimates the efficiency of 25 Islamic banks operating in Gulf Cooperation Council (GCC) countries during the period 2003–2009. It also examines the relationship between the efficiency of Islamic banks and the performance of their stock. The results suggest that efficiency measures, particularly technical and pure technical efficiency, have increased over the period of study but remain low as compared to conventional banks. The inefficiency of Islamic banks can be attributed to pure technical inefficiency rather than to scale inefficiency.