DETERMINANTS OF SUSTAINABLE GROWTH: A COMPARATIVE ANALYSIS OF CONVENTIONAL AND ISLAMIC BANKS

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Abstract

The purpose of this paper is to empirically examine the effect of intangible and financial resources on accounting- and market-based performance of two bank business models i.e. conventional and Islamic banks operating in fourteen different countries worldwide for two periods referred as pre (2006-2007) and post (2009-2010) financial crisis (568 observations). The required data to calculate different constituents of intangible (i.e. intellectual capital (IC)) and financial resources is derived from Bankscope database. The results reveal that both IC and financial capital resources are necessary for banks being conventional or Islamic to create value at all times i.e. pre- and post-crisis period. The results further indicate a positive relationship between IC, financial capital and accounting performance of both sets of banking; however IC and financial capital are only significantly associated with the market value of Islamic banks.

Keywords: Bank Business Model; Intangible Resources; Financial Performance; Market Value; Financial Crisis

How to cite this paper: Nawaz, T. (2016). Determinants of sustainable growth: A comparative analysis of conventional and Islamic banks. Corporate Ownership & Control, 14(1-3), 403-413. https://doi.org/10.22495/cocv14i1c3p1