How Do Competition and Regulation Impact Bank Efficiency in Emerging Economies? A Comparative Analysis for Conventional and Islamic Banks

• Conventional banks operate on an interest-based system, whereas Islamic banks implement a profit-and-loss-sharing principle. • Competition enhances the efficiency of conventional banks but reduces the efficiency of Islamic banks. • Stringent regulations negatively affect the efficiency of both conventional and Islamic banks. • Regulations strengthen the positive impact of competition on efficiency in conventional banks while mitigating the negative effects of competition on efficiency in Islamic banks. • Risk-taking decreases efficiency in both conventional and Islamic banks. • Cultural values and supervisory independence also influence the efficiency of conventional and Islamic banks.