Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research

Abedifar, P.; Ebrahim, S.; Molyneux, P.; Tarazi, A.

Abstract

This paper examines the recent empirical literature in Islamic banking and finance, highlights the main findings and provides a guide for future research. Early studies focus on the efficiency, production technology and general performance features of Islamic versus conventional banks, whereas more recent work looks at profit-sharing and loss-bearing behaviour, competition, risks as well as other dimensions such as small business lending and financial inclusion. Apart from key exceptions, the empirical literature suggests no major differences between Islamic and conventional banks in terms of their efficiency, competition and risk features (although small Islamic banks are found to be less risky than their conventional counterparts). There is some evidence that Islamic finance aids inclusion and financial sector development. Results from the empirical finance literature, dominated by studies that focus on the risk/return features of mutual funds, finds that Islamic funds perform as well, if not better, than conventional funds – there is little evidence that they perform worse than standard industry benchmarks.

Citation

Abedifar, P., Ebrahim, S., Molyneux, P., & Tarazi, A. (2015). Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research. Journal of Economic Surveys, 29(4), 637-670. https://doi.org/10.1111/joes.12113

• Journal Article Type: Article
• Acceptance Date: Apr 20, 2015
• Publication Date: Sep 1, 2015
• Deposit Date: Apr 21, 2015
• Publicly Available Date: Jun 1, 2017
• Journal: Journal of Economic Surveys
• Print ISSN: 0950-0804
• Electronic ISSN: 1467-6419
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 29
• Issue: 4
• Pages: 637-670
• DOI: https://doi.org/10.1111/joes.12113
• Keywords: G21, G23.
• Public URL: https://durham-repository.worktribe.com/output/1406918