Six papers make up this issue. The first one, titled Islamic Banking Sectors in Gulf Cooperative Council Countries: Analysis on Revenue, Cost and Profit Efficiency Concepts by Fakarudin Kamarudin, Annuar Md Nassir, Mohamed Hisham Yahya, Ridzwana Mohd Said and Bany Ariffin Amin Nordin, examines the revenue efficiency, the others efficiencies concepts and profit and cost efficiency levels of 74 banks (47 conventional and 27 Islamic banks) in Gulf Cooperative Council (GCC) countries over the periods 2007 to 2011. The level of efficiencies was measured using Data Envelopment Analysis (DEA) method which applied the intermediation approach. It has been found that the Islamic banks have exhibited a lower efficiency levels for all three efficiencies measures rather than conventional banks. This study seems to suggest revenue efficiency seems to play the main factor leading to the lower or higher profit efficiency levels. The determinants that could improve the revenue efficiency in GCC Islamic banks were identified using Multiple Regression Analysis (MRA). Four bank specific determinants were found to influence the improvement of revenue efficiency: asset quality, non-traditional activities, management quality and liquidity. The improvement of the revenue efficiency in GCC Islamic banks was also influenced by the macroeconomic variable inflation and concentration ratio of the three largest banks.

The second paper, titled Evaluating the Financial Performance of Turkish Banking Sector: A Fuzzy MCDM Approach by Aydın Çelen, inspects that at the turn of the century Turkish economy was meltdown due to the one of the harshest crises experienced throughout her history. Since then, thanks to very strict measures taken by Turkish government, the economy proceeded to the recovery period. This period, however, seems to be interrupted once more again by 2008-2009 global financial crisis.  In this study, the paper assess the financial performances of the different segments of the Turkish banking sector for the period between 2002 and 2010. In doing this, a combined methodology of Fuzzy Analytic Hierarchy Process (FAHP) and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) methods is utilized. The results indicate that the adverse effect of the 2001 financial crisis on the Turkish banking sector is enormous while the ongoing global crisis is not so destructive in the sector.

The third paper, titled The Causal Relationship between Imports and Economic Growth in the Nine Provinces of South Africa: Evidence from Panel Granger Causality Tests by Tsangyao Chang, Beatrice D. Simo-Kengne and Rangan Gupta, investigates the causal relationship between imports and growth in nine provinces of South Africa for the period 1996-2011, using panel causality analysis, which accounts for cross-section dependency and heterogeneity across regions. Our empirical results support unidirectional causality running from economic growth to imports for Gauteng, Mpumalanga, North West, and Western Cape; a bi-directional causality between imports and economic growth for KwaZulu-Natal; and no causality in any direction between economic growth and imports for the rest of provinces. This suggests that import liberalisation might not be an efficient strategy to improve provincial economic performance in South Africa. Indeed, provincial imports tend to increase in some provinces as economic growth improves.

The fourth paper, titled Economic Implications of Turkish Migration in Europe: Lessons Learned from Polish EU Accession by Wadim Strielkowski, Ondřej Glazar and Tomáš Ducháč, aims to predict the economic impact of Turkish EU accession with respect to migration flows. The analysis builds on the empirical evidence of past emigration flows of EU-18 to Germany and Netherlands employing the post EU Enlargement experience of Poland. Both panel data estimators used on the European migration and empirical analysis of Polish migration behavior to the EU after 2004 suggest that Turkish accession to the EU and its access to the EU labor market would not trigger massive labor migration. The most sober scenario predicts that eventual Turkish accession would lead to the short-term increase in migration which would start to fade away quickly soon reaching pre-shock levels.

The fifth paper, titled Monetary Policy Transmission through the Bank-Financing Channel in Malaysia: Evidence from Bank-Level Data by Hussam I. Asbeig and Salina H. Kassim, analyses the role of Islamic banks in transmitting monetary policy through the bank-financing channel in Malaysia. Bank size, liquidity and capitalization levels are hypothesized to be sources of cross-sectional differences among banks. If relevant, this implies that the financing channel is operational through the Islamic banks. We evaluate a sample period from 2000 to 2011, using panel data with robust standard errors, to investigate the heterogeneity of the financing supply in response to monetary policy shocks. The results show no significant differences across banks, based on size, capitalization and liquidity levels, and thus do not support the presence of a bank-financing channel in Malaysia. The study contributes a deeper understanding of the role of Islamic banks in the monetary policy transmission mechanism in Malaysia.

The last and sixth paper, titled Islamic Banks and Monetary Transmission Mechanism in Malaysia by M. Shabri Abd. Majid and Zamrah Hasin, explains that Monetary policy influences the real economy through various channels including the bank lending. Currently, Malaysia is operating under dual banking systems; conventional and Islamic banking. The latter has distinctive feature of interest-free. Hence, this study aims to empirically explore the relevance of Islamic banks' financing in channeling the monetary policy effects to the real economy. To achieve this objective, the study relies on an autoregressive distributed lag (ARDL) bound testing approach and innovation accounting approach, and uses quarterly data spanning from 1991:Q1 to 2010:Q4. The study documents that Islamic financing channel for monetary transmission exists in Malaysia. Islamic financing is unequally distributed to economic sectors in response to monetary policy shock. Furthermore, the findings also reflect that Islamic banking as operating in dual banking system is not spared from the interest rate and monetary conditions of the country. This clearly shows the behavior of Islamic banking which cannot shun away from the interest rate while its operation delinks from the interest rates.  In designing monetary policy, the central bank should consider Islamic financing as an alternative or complement channel for monetary transmission since this channel is just as active as conventional lending channel.

Abstract articles of the Journal of Economic Cooperation and Development, Vol.35 No.2 (2014)