ISLAMIC BANKING EFFICIENCY AND INCLUSIVE SUSTAINABLE GROWTH: THE ROLE OF FINANCIAL INCLUSION

This paper aims to estimate the efficiency scores of 153 Islamic banks of 32 countries during the period 2011 to 2017 by deploying data envelopment analysis and Simar–Wilson double bootstrapping regression techniques to determine how financial inclusion and its interaction effect with GDP growth impact on Islamic banking efficiency to promote inclusive sustainable growth. The findings show that the efficiency trends of Islamic banks in most countries have been inconsistent in the aftermath of the global financial crisis; this indicates that the banking industry is still bearing the consequences of that recession. However, Islamic banks in Bangladesh, Malaysia, Mauritia, Qatar, Tunisia, and Sudan are performing efficiently and, in spite of being war-affected countries, Islamic banks in Iraq and Palestine, more…