Abstract
Cost efficiency plays a significant role in bank risk taking behaviour. This paper examines the effect of cost efficiency on the liquidity risk of Islamic banks and conventional banks in 16 OIC countries from 1999 to 2013. The findings suggest that cost efficiency has a positive effect on liquidity risk. Other significant factors of liquidity risk include capital, bank specialization, credit risk, profitability, size, GDP and inflation whereas market concentration is not significant contributor to banking liquidity risk. There is weak evidence to support the notion that Islamic banks have higher level of liquidity risk than conventional banks. The findings imply the need to provide liquidity, probably through a well-functioning money market to lower liquidity risk in banking.
| Original language | English |
|---|---|
| Pages (from-to) | 55-71 |
| Number of pages | 17 |
| Journal | Jurnal Ekonomi Malaysia |
| Volume | 51 |
| Issue number | 2 |
| Publication status | Published - 1 Jan 2017 |
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Keywords
- Cost efficiency
- Islamic banking
- Liquidity risk
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
Cite this
Do cost efficiency affects liquidity risk in banking? Evidence from selected OIC countries. / Mohd Amin, Syajarul Imna; Mohamad, Shamsher; Shah, Mohamed Eskandar.
In: Jurnal Ekonomi Malaysia, Vol. 51, No. 2, 01.01.2017, p. 55-71.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Do cost efficiency affects liquidity risk in banking? Evidence from selected OIC countries
AU - Mohd Amin, Syajarul Imna
AU - Mohamad, Shamsher
AU - Shah, Mohamed Eskandar
PY - 2017/1/1
Y1 - 2017/1/1
N2 - Cost efficiency plays a significant role in bank risk taking behaviour. This paper examines the effect of cost efficiency on the liquidity risk of Islamic banks and conventional banks in 16 OIC countries from 1999 to 2013. The findings suggest that cost efficiency has a positive effect on liquidity risk. Other significant factors of liquidity risk include capital, bank specialization, credit risk, profitability, size, GDP and inflation whereas market concentration is not significant contributor to banking liquidity risk. There is weak evidence to support the notion that Islamic banks have higher level of liquidity risk than conventional banks. The findings imply the need to provide liquidity, probably through a well-functioning money market to lower liquidity risk in banking.
AB - Cost efficiency plays a significant role in bank risk taking behaviour. This paper examines the effect of cost efficiency on the liquidity risk of Islamic banks and conventional banks in 16 OIC countries from 1999 to 2013. The findings suggest that cost efficiency has a positive effect on liquidity risk. Other significant factors of liquidity risk include capital, bank specialization, credit risk, profitability, size, GDP and inflation whereas market concentration is not significant contributor to banking liquidity risk. There is weak evidence to support the notion that Islamic banks have higher level of liquidity risk than conventional banks. The findings imply the need to provide liquidity, probably through a well-functioning money market to lower liquidity risk in banking.
KW - Cost efficiency
KW - Islamic banking
KW - Liquidity risk
UR - http://www.scopus.com/inward/record.url?scp=85042554587&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85042554587&partnerID=8YFLogxK
M3 - Article
VL - 51
SP - 55
EP - 71
JO - Jurnal Ekonomi Malaysia
JF - Jurnal Ekonomi Malaysia
SN - 0126-1962
IS - 2
ER -