Efficiency in Islamic and conventional banking:an international comparison

The paper investigates the efficiency of a sample of Islamic and conventional banks in 10 countries that operate Islamic banking for the period 1996–2002, using an output distance function approach. We obtain measures of efficiency after allowing for environmental influences such as country macroeconomic conditions, accessibility of banking services and bank type. While these factors are assumed to directly influence the shape of the technology, we assume that country dummies and bank size directly influence technical inefficiency. The parameter estimates highlight that during the sample period, Islamic banking appears to be associated with higher input usage. Furthermore, by allowing for bank size and international differences in the underlying inefficiency distributions, we are also able to demonstrate statistically significant differences in inefficiency related to these factors even after controlling for specific environmental characteristics and Islamic banking. Thus, for example, our results suggest that Sudan and Yemen have relatively higher inefficiency while Bahrain and Bangladesh have lower estimated inefficiency. Except for Sudan, where banks exhibits relatively strong returns to scale, most sample banks exhibit very slight returns to scale, although Islamic banks are found to have moderately higher returns to scale than conventional banks. While this suggests that Islamic banks may benefit from increased scale, we would emphasize that our results suggest that identifying and overcoming the factors that cause Islamic banks to have relatively low potential outputs for given input usage levels will be the key challenge for Islamic banking in the coming decades.

Efficiency in Islamic and conventional banking:an international comparison

The paper investigates the efficiency of a sample of Islamic and conventional banks in 10 countries that operate Islamic banking for the period 1996 to 2002, using an output distance function approach. We obtain measures of efficiency after allowing for environmental influences such as country macroeconomic conditions, accessibility of banking services and bank type. While these factors are assumed to directly influence the shape of the technology, we assume that country dummies directly influence technical inefficiency. The parameter estimates highlight that during the sample period, Islamic banking appear to be associated with higher input usage. Furthermore, by allowing for international differences in the underlying inefficiency distributions, we are also able to demonstrate statistically significant differences in efficiency across countries even after controlling for specific environmental characteristics and Islamic banking. Thus, for example, our results suggest that Sudan and Yemen have relatively higher inefficiency while Iran and Malaysia have lower estimated inefficiency. Except for Sudan, where banks exhibits relatively strong returns to scale, most sample banks exhibit very slight returns to scale, although Islamic banks are found to have moderately higher returns to scale than conventional banks. However while this suggests that Islamic banks may benefit from increased scale, we would emphasize that our results suggest that identifying and overcoming the factors that cause Islamic banks to have relatively high input requirements will be the key challenge for Islamic banking in the coming decades.

Loan loss provisions, bank valuations and discretion : a comparative study between conventional and Islamic banks

This study investigates the use of reported loan loss provisions (LLP) by investors in their valuations of banks within the Middle East and North Africa region between the years 2006 and 2011. We decompose LLP into discretionary and non-discretionary components to test for differential valuations in the two banking sectors. We use alternative criteria to define the components of LLP in banks: loan quality/size and earnings management/ manipulation incentives. We employ a price-level valuation model estimated using two-stage analyses. We find that LLP has positive value relevance to investors in both banking sectors. Investors in Islamic banks price the discretionary component relatively lower than their conventional counterparts. We attribute this result to differences in product and governance structures as well as to the religious perception of Islamic banking. In both banking sectors, investors construe an increase in the non-discretionary component as irrelevant valuation information. Our results are relevant to bank regulators in showing the signalling effect of LLP to bank value and stability.

Loan loss provisions, bank valuations and discretion:a comparative study between conventional and Islamic banks

This study investigates the use of reported loan loss provisions (LLP) by investors in their valuations of banks within the Middle East and North Africa region between the years 2006 and 2011. We decompose LLP into discretionary and non-discretionary components to test for differential valuations in the two banking sectors. We use alternative criteria to define the components of LLP in banks: loan quality/size and earnings management/manipulation incentives. We employ a price-level valuation model estimated using two-stage analyses. We find that LLP has positive value relevance to investors in both banking sectors. Investors in Islamic banks price the discretionary component relatively lower than their conventional counterparts. We attribute this result to differences in product and governance structures as well as to the religious perception of Islamic banking. In both banking sectors, investors construe an increase in the non-discretionary component as irrelevant valuation information. Our results are relevant to bank regulators in showing the signalling effect of LLP to bank value and stability. © 2013 Elsevier B.V.

Designs of coherent optical fast OFDM and performance comparison to conventional OFDM

We discuss practical designs of coherent optical fast OFDM, and compare the performance of this scheme to conventional OFDM to identify its suitable application scenarios. © OSA 2013

Enhanced dispersion tolerance of coherent offset-QAM OFDM over conventional OFDM

We experimentally demonstrate 38-Gbit/s offset-16QAM OFDM over 840km without guard interval, and numerically show that 112-Gbit/s PDM offset-QPSK OFDM achieves 23% increase in net capacity over conventional OFDM under the same transmission reach. © 2014 Optical Society of America.

Relationships between flavour, lipid composition and antioxidants in organic, free-range and conventional chicken breasts from modelling

Consumers expect organic, free-range and corn-fed chicken to be nutritionally wholesome and have premium flavour characters. Interrelationships between flavour, fatty acids and antioxidants of retailed breasts were explored using simple correlations and chemometrics. Saturated fatty acid C16:0, and n-6 polyunsaturated C20:4 and C22:4 contents were correlated with lipid oxidation products (thiobarbituric acid reactive substances) and in partial least-squares regression (PLS1) with 32 high-resonance gas chromatography (flame ionization) flavour components (r2>0.90), and also linked (r2>0.80) to antioxidants (-tocopherol, glutathione and catalase). A further 10 high-resonance gas chromatography nitrogen phosphorus detector flavour components were correlated (r 2>0.85) with C18:3(n-3) content. Chicken character was correlated with C18:3(n-3), and C18:3(n-6) inversely with oily, off-flavour and lipid oxidation. Sweet, fruity and oily aromas were linked in PLS1 with 13 specific fatty acids (r2>0.6), and bland taste with total summed (six) fatty acid fractions (r2>0.81). Specific antioxidants were correlated with sweet, fruity and chicken aromas, and -tocopherol inversely with lipid oxidation. PLS2 confirmed relationships between fatty acid composition, antioxidants and the subsets of 32 and 10 flavour components. Clear relationships were thus observed between lipid and antioxidant compositions and flavour in chicken breast meat.

Microchannels in conventional single-mode fibers

Microchannels are fabricated into conventional single-mode fibers by femtosecond laser processing and chemical etching. Fabrication limitations imposed by the fiber geometry are highlighted and resolved through a simple technique without compromising fabrication flexibility. A microfluidic fiber device consisting of a 4 μm wide microchannel that intersects the fiber core for refractive index sensing is further demonstrated. © 2006 Optical Society of America.

Corrosion of silicon carbide ceramics using conventional and electrochemical methods

Silicon carbide ceramics are candidate materials for use in aggressive environments, including those where aqueous acids are present. Standard corrosion testing methods such as immersion testing are not always sufficiently sensitive for these ceramics owing to the very low, almost unobservable, corrosion rates encountered. Using electrochemical methods the corrosion processes can be assisted, leading to higher rates and thus the elucidation of reaction mechanisms. The behaviour of a sintered and a reaction bonded silicon carbide has been investigated in aqueous HCl, HF, HNO3, and H2SO4, using standard immersion and new electrochemical methods. Both materials were passive in HCl, HNO3, and H2SO4 because of the formation of a surface silica film, and were active in HF. In HF, corrosion of sintered silicon carbide was slight and the residual silicon was removed from reaction bonded specimens.