Title: A comparative analysis of the performance of Islamic and conventional banks: does corporate governance matter?

Authors: Ejaz Aslam; Razali Haron; Salman Ahmad

Addresses: School of Islamic Economics, Banking & Finance (SIEBF), Minhaj University, Township Lahore, Punjab 54770, Pakistan ' IUM Institute of Islamic Banking and Finance (IIiBF), IIUM, Jalan Gombak, 53100, Malaysia ' First IBL Modaraba, Gulberg 3, 54000, Lahore Punjab, Pakistan

Abstract: The purpose of this study is to investigate the impact of corporate governance (CG) internal structure on the performance of Islamic and conventional banking system in Pakistan. To account for the problem of heteroscedasticity, this study used GLS estimation technique by using a sample of five fully fledged Islamic and 15 conventional banks for the period from 2006 to 2015. The study finds that board size and its composition largely contribute to the Islamic and conventional banking performance. However, board committees have an insignificant relationship with the performance of conventional and Islamic banks that demands further investigation into the structure and powers of the board committees. In short, this study provides evidence that corporate governance does matter for the performance of Islamic and conventional banking. The current findings are useful for the policymakers and regulators to improve the existing governance structure for achieving better performance in the financial sector.

Keywords: corporate governance; Islamic and conventional banks; operational performance; financial performance; stock performance; generalise least square; GLS.

DOI: 10.1504/IJBEX.2021.115371

International Journal of Business Excellence, 2021 Vol.24 No.1, pp.53 - 67

Received: 18 Dec 2018
Accepted: 08 Jun 2019
Published online: 01 Jun 2021 *

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