arbiter
JournalsPricingAccount

The Impact of Earnings Management on the Efficiency and Stability of Islamic and Conventional Banks: Evidence from Pakistan

Qazi Yasir Arafat

Zagreb International Review of Economics and Business2025https://doi.org/10.2478/zireb-2025-0017article
ABDC C
Weight
0.50

What the paper says

Abstract This study investigates the impact of earnings management (EM) on the efficiency and stability of Islamic and conventional banks in Pakistan. A dataset comprising 6 Islamic and 13 private commercial banks from 2002 to 2022 was analyzed. Efficiency was proxied by return on equity (ROE) and return on assets (ROA), while stability was measured by Z-Scores. EM was represented by discretionary loan loss provisions. Regression models were employed, guided by Breusch-Pagan and Hausman tests. The findings reveal a significant disparity between the effects of EM on the efficiency and stability of Islamic and conventional banks. EM in Islamic banks does not significantly impact efficiency and stability, whereas EM in conventional banks has a negative effect. The study concludes that EM in Islamic banks is not detrimental to stakeholders in terms of efficiency and stability, warranting further research into the factors driving decreasing EM in conventional banks.

Open paper page →

Cite this paper

https://doi.org/https://doi.org/10.2478/zireb-2025-0017

Or copy a formatted citation

@article{qazi2025,
  title        = {{The Impact of Earnings Management on the Efficiency and Stability of Islamic and Conventional Banks: Evidence from Pakistan}},
  author       = {Qazi Yasir Arafat},
  journal      = {Zagreb International Review of Economics and Business},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.2478/zireb-2025-0017},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

The Impact of Earnings Management on the Efficiency and Stability of Islamic and Conventional Banks: Evidence from Pakistan

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.