A Survival-Time Analysis in Islamic and Conventional Banks in the GCC: Empirical Analysis from Discrete-Time Duration Models

This study aims to investigate the survival time of Islamic and conventional banks in the Gulf region, taking into account the impact of the global financial crisis and by employing the discrete-time duration models. The empirical application is comprised of fifty-six commercial banks taken from five countries over the period of 1995 to 2011. In addition, to examine the differences between banks, a range of explanatory variables from both the micro- and macro-level are included in several models. The results of hazard and survivor functions indicate that the Islamic and conventional banks form two distinct bank types, where Islamic banks have a higher incidence rate of failure and therefore a shorter survival time. The discrete-time duration model (or the complementary log-log) findings for the all-banks-pooled model confirm that the hazard rate increases with Islamic banks. Furthermore, the analysis of each bank type reveals that the effect of covariates on survival time differs from