المستخلص: |
This study determines whether it is possible to distinguish between conventional and Islamic banks Palestine on the basis of financial characteristics alone. Islamic banks operate under different principles, such as risk sharing and the prohibition of interest, yet both types of banks face similar competitive conditions. The combination of effects makes it unclear whether financial ratios will differ significantly between the two categories of banks. We input 26 financial ratios into log it to determine whether researchers or regulators could use these ratios to distinguish between the two types of banks. Although the means of several ratios are similar between the two categories of banks, non-linear classification techniques are able to correctly distinguish Islamic from conventional banks in out-of-sample tests at about a 92% success rate.
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