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dc.contributor.authorKabir, Md Nurul
dc.contributor.authorWorthington, Andrew
dc.contributor.authorGupta, Rakesh
dc.date.accessioned2018-10-18T00:02:12Z
dc.date.available2018-10-18T00:02:12Z
dc.date.issued2015
dc.identifier.issn0927-538X
dc.identifier.doi10.1016/j.pacfin.2015.06.001
dc.identifier.urihttp://hdl.handle.net/10072/101498
dc.description.abstractIn this paper, we consider the levels of credit risk in Islamic and conventional banks. One problem with existing studies is the use of accounting information alone to assess credit risk, and this could be especially misleading with Islamic banking. Using a market-based credit risk measure, Merton's distance-to-default (DD) model, we evaluate the credit risk of 156 conventional banks and 37 Islamic banks across 13 countries between 2000 and 2012. We also calculate the accounting information-based Z-score and nonperforming loan (NPL) ratio for the purpose of comparison. Our results show that Islamic banks have significantly lower credit risk than conventional banks as based on DD. In contrast, and as expected, Islamic banks display much higher credit risk using the Z-score and NPL ratio. These findings suggest that the measure chosen plays a significant role in assessing the actual credit risk of Islamic banks.
dc.description.peerreviewedYes
dc.languageEnglish
dc.language.isoeng
dc.publisherElsevier
dc.relation.ispartofpagefrom327
dc.relation.ispartofpageto353
dc.relation.ispartofjournalPacific-Basin Finance Journal
dc.relation.ispartofvolume34
dc.subject.fieldofresearchAccounting, auditing and accountability
dc.subject.fieldofresearchBanking, finance and investment
dc.subject.fieldofresearchFinancial institutions (incl. banking)
dc.subject.fieldofresearchcode3501
dc.subject.fieldofresearchcode3502
dc.subject.fieldofresearchcode350204
dc.titleComparative credit risk in Islamic and conventional bank
dc.typeJournal article
dc.type.descriptionC1 - Articles
dc.type.codeC - Journal Articles
dcterms.licensehttp://creativecommons.org/licenses/by-nc-nd/4.0/
dc.description.versionAccepted Manuscript (AM)
gro.facultyGriffith Business School, Department of Accounting, Finance and Economics
gro.rights.copyright© 2015 Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence (http://creativecommons.org/licenses/by-nc-nd/4.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, providing that the work is properly cited.
gro.hasfulltextFull Text
gro.griffith.authorGupta, Rakesh


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