Topics in Middle Eastern and North African Economies

Document Type

Article

Publication Date

9-1-2017

Abstract

This paper presents empirical evidence on the different impacts of principal-agent relationships on risk-taking behavior and performance of Islamic banks, compared to conventional ones, for a sample of 105 banks in 8 Arab countries during the period (2005 – 2009). It distinguishes between two aspects of shareholder structure; namely, ownership concentration and shareholders rights. Empirical evidence showed that principal-agent conflicts were proved prominent in Islamic, as well as conventional banks due to the inverse and statistically significant effect of shareholder rights on risk-taking behavior. Moreover, it was found that principal-agent conflicts are more inherent in conventional banks, with regard to their impact on performance. The results were robust to including different bank specific and country specific variables.

Journal Title

Topics in Middle Eastern and North African Economies

ISSN

2334-282X

Publisher

Middle East Economic Association and Loyola University Chicago

Volume

19

Issue

2

Comments

Presentation of the articles in the Topics in Middle Eastern and North African Economies was made possible by a limited license granted to Loyola University Chicago and Middle East Economics Association from the authors who have retained all copyrights in the articles.

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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