Scholarlink

<p>This study aims to investigate the role of operational efficiency in driving profitability and financing distribution in Islamic banks. This research addresses this objective using 20 annual country-level panel data regressions over the period 2013–2022. We also introduce the concept of “Efficiency in Efficiency” (EiE), which emphasizes that operational efficiency is not merely about cost reduction, but also about how efficiently it contributes to generating profit and financing distribution. The estimation results indicate that operational efficiency enhances profitability; however, it simultaneously hampers financing distribution. Moreover, profitability itself drives the distribution of financing. These findings confirm the existence of a partial trade-off in the impact of operational efficiency on financing distribution, as the direct adverse effect of operational efficiency on financing distribution is partially substituted by a positive impact through profitability. Meanwhile, the EiE of profitability and the EiE of financing in selected countries show quite diverse outcomes. The differences in the results suggest that unique country characteristics, market depth, and regulation maturity are key factors that influence both the EiE of Profitability and the EiE of Financing.</p>

错误：搜索内容不能为空，请输入英文关键词
错误：关键词超出字数限制，请精简
高级检索

Islamic banks’ dilemma on profitability and financing distribution: a trade-off implication of efficiency

  • 期刊论文

  • 发表日期：

    2025年7月8日

查看全文
  • Idah Zuhroh,
  • Nazaruddin Malik,
  • Muhammad Khoirul Fuddin,
  • Fitri Rusdianasari,
  • Mochamad Rofik

摘要

This study aims to investigate the role of operational efficiency in driving profitability and financing distribution in Islamic banks. This research addresses this objective using 20 annual country-level panel data regressions over the period 2013–2022. We also introduce the concept of “Efficiency in Efficiency” (EiE), which emphasizes that operational efficiency is not merely about cost reduction, but also about how efficiently it contributes to generating profit and financing distribution. The estimation results indicate that operational efficiency enhances profitability; however, it simultaneously hampers financing distribution. Moreover, profitability itself drives the distribution of financing. These findings confirm the existence of a partial trade-off in the impact of operational efficiency on financing distribution, as the direct adverse effect of operational efficiency on financing distribution is partially substituted by a positive impact through profitability. Meanwhile, the EiE of profitability and the EiE of financing in selected countries show quite diverse outcomes. The differences in the results suggest that unique country characteristics, market depth, and regulation maturity are key factors that influence both the EiE of Profitability and the EiE of Financing.