What Drives Efficiency Of Islamic Banks Among Regions?

2013 ◽  
Vol 29 (5) ◽  
pp. 1411
Author(s):  
Sandrine Kablan ◽  
Ouidad Yousfi
Keyword(s):  
Stochastic Frontier Analysis ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
Efficiency Score ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Frontier Analysis ◽  
Explanatory Variables ◽  
One Step ◽  
Government Legislation

<p>Our study tries to determine what drives the efficiency of Islamic banks. To this purpose, we use the stochastic frontier analysis in one step. This allows us to take into account in the frontier function, explanatory variables which influence efficiency. We find that market power and profitability have a positive impact on Islamic banks efficiency, while it is the contrary for their size. Besides, Islamic banks display an average efficiency score of 92%, with Islamic banks settled down in Asia displaying the highest score (96%). Indeed, countries like Malaysia and Pakistan undertake reforms in order to allow banks to better cope with the existing financial system. On the contrary, Islamic banks operating in countries with Islamic banking as government legislation are not the most efficient ones.</p>

HOW LARGE ARE PRODUCTIVITY DIFFERENCES BETWEEN ISLAMIC AND CONVENTIONAL BANKS?

2019 ◽  
pp. 1-20
Author(s):  
WAHIDA AHMAD ◽  
DAVID PRENTICE
Keyword(s):  
Productivity Growth ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Production Functions ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Frontier Analysis ◽  
The Difference ◽  
Conventional Banks

Despite the enormous growth in Islamic banking, most studies, using DEA/Stochastic Frontier Analysis, find Islamic banks are either equally or less productive than conventional banks. We apply the Olley–Pakes (OP) and Ackerberg–Caves–Frazer (ACF) approaches for estimating the production functions of conventional, Islamic and mixed banks in Bahrain and Malaysia between 1990 and 2011. The ACF results are the most plausible. Though Islamic banks tend to be less efficient than conventional banks the difference is not statistically significant. In Malaysia, mixed banks are significantly more productive than other banks and tend to have faster productivity growth.

scholarly journals Profit efficiency of shariah banks in Indonesia and the determining factors: Using Stochastic Frontier Analysis Method

2016 ◽  
Vol 19 (2) ◽  
pp. 271 ◽  
Author(s):  
Sri Wahyuni ◽  
Pujiharto Pujiharto
Keyword(s):  
Stochastic Frontier Analysis ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
Efficiency Score ◽  
Capital Adequacy ◽  
Profit Efficiency ◽  
Global Crisis ◽  
Frontier Analysis ◽  
Business Units ◽  
Determining Factors

This study aims to measure the efficiency of profit and examine the factors that affect the efficiency of shariah banks profit in Indonesia such as the size of banks, risk financing, and capital adequacy. This study used the Shariah banks in Indonesia, during the period of 2010-2014. These shariah banks were selected as the sample Commercial shariah banks and Shariah Business Units. This study uses three stages of research. First, it measures the efficiency of profit using a parametric approach that is Stochastic Frontier Approach (SFA). Secondly, its uses regression profit efficiency scores with various determinants of profit efficiency. The third phase is testing the efficiency score during the global crisis (2008-2009) and after the global crisis period (2010-2014). It shows that in overall there occurred profit efficiency in the shariah banks in Indonesia as it was indicated by the score of profit efficiency that is less than one. The inefficiency occurred in both Shariah banks and shariah business units. Bank size has a positive impact on profit efficiency. The bigger the bank, the better profit efficiency is. It can be implied that this research provides the managers the clues that shariah banks should improve their profit efficiency management. For Bank Indonesia, they can use this evidence to design policies that can encourage profit efficiency in shariah banks.

scholarly journals Technical Efficiency among Pepper Farmers in Sarawak, Malaysia: A Stochastic Frontier Analysis

2020 ◽  
Vol 10 (3) ◽  
pp. 729-739
Author(s):  
Anita Rosli ◽  
Alias Radam ◽  
Khalid Abdul Rahim ◽  
Amin Mahir Abdullah
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Agricultural Practices ◽  
Piper Nigrum ◽  
Maximum Output ◽  
Full Time ◽  
Frontier Analysis ◽  
One Step ◽  
The Mean

This study aimed to estimate the technical efficiency among pepper (Piper nigrum. L) farmers in Sarawak, Malaysia, using Stochastic Frontier Analysis (SFA). SFA involves a one-step process that can estimate technical inefficacy factors simultaneously with the production frontier. 678 pepper farmers were involved in this study, and the data were collected from 2012 to 2013. The mean score for technical efficiency was 0.518, indicating that pepper farmers were not efficient. However, the inefficiency model showed that education level, membership in farmers’ association, full-time as a pepper farmer, attending courses and visiting sample farms were factors that significantly improved inefficiency. The major problem of pepper farming in Sarawak is poor agricultural practices where farmers do not fully utilize the available agricultural inputs to produce maximum output. Based on the findings, farmers must improve their knowledge and skills in pepper farming through agronomic education.

Performance analysis of electricity distribution sector post the implementation of electricity act 2003: empirical evidence from India

2020 ◽  
Vol 17 (5) ◽  
pp. 669-696
Author(s):  
Pavan Khetrapal
Keyword(s):  
Stochastic Frontier Analysis ◽  
Corporate Strategy ◽  
Unobserved Heterogeneity ◽  
Stochastic Frontier ◽  
Operational Efficiency ◽  
Electricity Distribution ◽  
Content Type ◽  
Frontier Analysis ◽  
Explanatory Variables ◽  
Utility Managers

PurposeThe objective of the present study is to evaluate and analyse the performance of Indian electricity distribution utilities post the implementation of landmark Electricity Act 2003.Design/methodology/approachStochastic frontier analysis (SFA) that incorporates exogenous influences on operational efficiency is adopted in the present study. Specifically, a stochastic frontier production function model with a technical inefficiency effects model (Battese and Coelli, 1995) is chosen as a preferred model. In this model, the function that explains the inefficiency scores is estimated in a single stage with the production technology. This avoids the problem of inconsistency which is possible in the two-stage approach.FindingsThe sample involved 52 Indian electricity distribution utilities for seven-year period from 2006 to 2013. Major findings of SFA show that Indian electricity distribution utilities post the implementation of Electricity Act (2003) had, on average, experienced efficiency improvement during the observed period. The overall mean technical effciency score is estimated as 78.5% which indicates that there exist wide scope for effciency improvement in the sector. Further, the empirical findings also indicate that publicly owned distribution utilities obtain average technical efficiencies of 71.3%, which is lower than privately owned distribution utilities, which achieve average technical efficiencies of 85.7%.Research limitations/implicationsPower supply quality indicators such as SAIFI, SAIDI, CAIFI, etc. and unobserved heterogeneity also influence the efficiency analysis of electricity distribution utilities. Hence, these parameters as explanatory variables can be incorporated in the future work.Practical implicationsThe results obtained from this empirical study would likely be helpful for utility managers and policymakers to know how well they are performing, and how a better corporate strategy a particular utility can formulate to improve its operational efficiency and also its position in the marketplace.Originality/valueThis paper is amongst the first significant attempts that implement SFA approach to the panel dataset over a longer period of time – 2006 to 2013, so, as to evaluate and analyse the operational efficiency of Indian electricity distribution utilities in a single framework after the enactment of Electricity Act (2003). Unlike previous studies, this study investigates the degree to which various exogenous (or environmental) factors influence efficiency levels in these utilities.

scholarly journals Factors Affecting Technical Efficiency of Rubber Smallholders in Negeri Sembilan, Malaysia

2017 ◽  
Vol 9 (5) ◽  
pp. 226
Author(s):  
A. Aliyu ◽  
Ismail Abd Latif ◽  
Mad Nasir Shamsudin ◽  
Nolila Mohd Nawi
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Likelihood Function ◽  
Stochastic Frontier ◽  
Efficiency Score ◽  
Farm Size ◽  
Cross Sectional ◽  
Frontier Analysis ◽  
The Mean ◽  
Size Task

The main objective of the study was to figure out, identify and analyse the technical efficiency of rubber smallholders’ production in Negeri Sembilan, Malaysia. Multi-stage data collection procedures, comprising both purposive and random sampling techniques, were used. Using structured questionnaires, farm-level information with cross sectional data from five districts of Negeri Sembilan, were employed in the study. A parametric Stochastic Frontier Analysis (SFA), with a transcendental logarithmic (Translog) functional form, was used in the study. The descriptive statistics results revealed that, the mean rubber yield was 5465 kg while that of the seven inputs used include 1.2 ha, 602.7, 2.33, 363.6 kg, 13.0 lit, 13.2 man days and 2.47 respectively for farm size, task, farm tools, fertilizer, herbicides, labour and rubber clones.The inferential statistics showed that, the mean technical efficiency was found to be 0.73 with a standard deviation of 0.089. Thus, this translates that 27% accounted for technical inefficiency. Both the sigma square and gamma coefficients were found to be statistically significant at 1% level. The Log Likelihood Function (LLF) and the Log Rati (LR) test were found to be respectively 167.7 and 34.07. The results further revealed that, although none of the farms were found to be on the frontier, however, 9 farms were very near the frontier with efficiency score range between 0.90-0.99. And twenty (20) firms have range 0.80-0.90. Race, Tapping experience, household number and extension agent’s visits were found to be technically significant and are thus critical in determining technical efficiency of rubber smallholders in Negeri Sembilan, Malaysia.

scholarly journals Estimation of technical efficiency of Czech farms operating in less favoured areas

2019 ◽  
Vol 65 (No. 10) ◽  
pp. 445-453
Author(s):  
Tamara Rudinskaya ◽  
Tomas Hlavsa ◽  
Martin Hruska
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
Agricultural Area ◽  
Farm Size ◽  
Identification System ◽  
Accounting Data ◽  
Frontier Analysis ◽  
The Impact

This paper deals with the technical efficiency analysis of farms in the Czech Republic. The empirical analysis provides an evaluation of technical efficiency with regard to the farm size, farm specialisation, and farm location. Accounting data of Czech farms from the Albertina database for the years 2011–2015 were used for the analysis. The data were classified by the utilised agricultural area and location of the farm expressed as a less favoured area type from the Land Parcel Identification System (LPIS) database. Research was conducted using the translogarithmic production function and Stochastic Frontier Analysis. The results indicate positive impact of farm size, expressed by utilised agricultural area, on technical efficiency. The analysis of the impact of farm specialisation on technical efficiency verified that farms specialised on animal production are more efficient. The lowest technical efficiency is shown by farms situated in mountainous Less Favoured Areas (LFAs), the highest technical efficiency by farms located in non-LFA regions.

scholarly journals Re-Examining Regional Total-Factor Water Efficiency and Its Determinants in China: A Parametric Distance Function Approach

Water ◽  
2018 ◽  
Vol 10 (10) ◽  
pp. 1286 ◽  
Author(s):  
Jiao Zheng ◽  
Hengquan Zhang ◽  
Zhencheng Xing
Keyword(s):  
Distance Function ◽  
Water Policy ◽  
Stochastic Frontier Analysis ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
Policy Formulation ◽  
Water Efficiency ◽  
Water Sustainability ◽  
Frontier Analysis ◽  
Resource Endowment

It is accepted that improving water efficiency is a key task for China in achieving water sustainability, as the knowledge of water efficiency and its determinants can provide critical information for water policy formulation. To this end, this paper presents a parametric frontier approach to analyze water efficiency performance and its influencing factors in one step. The proposed approach first introduces the Shephard water distance function to construct total-factor water efficiency (TFWE) index and then adopts the stochastic frontier analysis (SFA) technique to compute the index and its determinants. A case study of regions in China from 2000 to 2015 is presented. The main findings are summarized as follows: (1) Both the overall China and most of the regions still have room for improvement in water efficiency. SFA and data envelopment analysis (DEA) might lead to different results in benchmarking water efficiency. Moreover, SFA has higher discriminating power than DEA in this regard. (2) There exists significant disparity of water efficiency among the regions of China, and the difference in TFWE takes on a U-shaped evolution trend, which first decreases in a fluctuation way and then increases monotonically. (3) Factors like industrial structure, import and export trade, environmental regulation and urbanization level have a positive impact on water efficiency, while resource endowment and economic level exhibit negative and nonlinear effects, respectively. Finally, several policy recommendations are made to improve water efficiency levels and promote water sustainability.

scholarly journals The Cost of Reducing Municipal Unsorted Solid Waste: Evidence from Municipalities in Chile

2021 ◽  
Vol 13 (12) ◽  
pp. 6607
Author(s):  
Maria Molinos-Senante ◽  
Alexandros Maziotis
Keyword(s):  
Municipal Solid Waste ◽  
Solid Waste ◽  
Marginal Cost ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Economic Cost ◽  
Well Being ◽  
Efficiency Score ◽  
Frontier Analysis ◽  
Waste Sector

The management of municipal solid waste sector is crucial for a sustainable circular economy. Waste utilities are expected to provide high quality solid waste services at an affordable price. The efficient management of solid waste requires its assessment from an economic and environmental perspective, i.e., eco-efficiency assessment. Although the reduction of unsorted waste incurs an economic cost, its positive externalities are huge for the well-being of society, the environment, and people. Our study quantifies the marginal cost of reducing any unsorted waste using stochastic frontier analysis techniques which allow us to estimate the eco-efficiency of the waste sector. Our empirical approach focuses on the municipal solid waste collection and recycling services provided by several waste utilities in Chile. The results indicate that substantial eco-inefficiency in the sector exists, since the average eco-efficiency score is roughly 0.5 which means that the municipalities could approximately halve their operational costs and unsorted waste to produce the same level of output. The average marginal cost of reducing unsorted waste is 32.28 Chilean pesos per ton, although notable differences are revealed among the waste utilities evaluated. The results provided by this study are of great interest to stakeholders to promote sustainable management solutions and resource efficient solid waste services.

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