scholarly journals MALAYSIAN ISLAMIC BANKS’ EFFICIENCY: AN INTRA-BANK COMPARATIVE ANALYSIS OF ISLAMIC WINDOWS AND FULL-FLEDGED SUBSIDIARIES

2017 ◽  
Vol 16 (1) ◽  
Author(s):  
Oladipupo Luqman Salami ◽  
Adewale Abideen Adeyemi
Keyword(s):  
Comparative Analysis ◽  
Technical Efficiency ◽  
Empirical Studies ◽  
Financial Service ◽  
Scale Efficiency ◽  
Islamic Banking ◽  
Data Envelopment ◽  
Islamic Banks ◽  
Financial Reports ◽  
Intra Bank

This paper aims to fill an apparent dearth of empirical studies that compare the efficiency of Islamic banks in Malaysia during their operation as Islamic windows and later transformation to full-fledged Islamic banks. Data obtained from the annual financial reports of the sampled banks is analyzed using the Data Envelopment Analysis (DEA) via DEAP 2.1 software to assess both the technical and scale efficiency of the banks under sample. Results obtained indicate that the banks have improved over the years in terms of both scale and technical efficiency although the former takes prominence. In general, the banks were found to be more efficient as Islamic windows compared to being full-fledged subsidiaries. This augurs well for the current disposition where, as per the Islamic Financial Service Act 2013, Islamic banks in Malaysia may now operate as full-fledged banks from their hitherto Islamic banking window status.Keywords: Scale Efficiency; Technical Efficiency; Islamic Window; Full-Fledged Banks.

scholarly journals The Efficiency Performance of Global Islamic Banks

2016 ◽  
Vol 1 (1) ◽  
Author(s):  
Norlina Kadri ◽  
Rossazana Abdul Rahim ◽  
Dyg Siti Zahrah Abg. Abdillah
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Banking Sector ◽  
Scale Efficiency ◽  
Islamic Banking ◽  
Data Envelopment ◽  
Islamic Banks ◽  
Technical Inefficiency ◽  
Efficiency Performance ◽  
Dea Approach

This paper examines the efficiency performance of the Islamic banks that consist of 14 countries namely Bahrain, Bangladesh, Iran, Jordan, Kuwait, Lebanon, Malaysia, Pakistan, Qatar, Saudi, Tunisia, Turkey, UAE, and Yemen during the period of 2004-2011 with 44 Islamic banks involved. The efficiency estimates of individual banks are evaluated using the Data Envelopment Analysis (DEA) approach. The empirical findings suggest that during the period of study, pure technical efficiency outweighs scale efficiency in the global Islamic banking sector implying that the Islamic banks have been managerially efficient in exploiting their resources to the fullest extent. The empirical findings seem to suggest that the global Islamic banks have exhibited high pure technical efficiency. During the period of study it is found that pure technical efficiency has greater influence in determining the total technical inefficiency of the Global Islamic banking sectors.

The efficiency of Islamic banks in Malaysia: Based on DEA and Malmquist productivity index

2018 ◽  
Vol 6 (3) ◽  
pp. 15
Author(s):  
Mohd Faizal Basri ◽  
Amirul Afif Muhamat ◽  
Mohamad Nizam Jaafar
Keyword(s):  
Technical Efficiency ◽  
Foreign Banks ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Scale Efficiency ◽  
Islamic Banking ◽  
Data Envelopment ◽  
Islamic Banks ◽  
Finance House ◽  
The Impact

This paper aims to investigate the impact of liberalisation move by Bank Negara Malaysia (BNM) towards the efficiency of domestic and foreign Islamic banks (IBs) in Malaysia. This is consequence of decision of BNM that awarded licenses to three international IBs, namely Kuwait Finance House (KFH), Al Rajhi Bank, and Asian Finance Bank in 2005. In addition, this study takes into consideration the existing foreign banks in the country that operate via Islamic banking subsidiaries as part of foreign IBs. The research evaluates the impact of foreign Islamic banks in Malaysia by measuring their contribution to the growth of the Malaysian Islamic banking industry. Using a sample of 16 IBs in Malaysia from 2008 to 2015, the study uses Data Envelopment Analysis (DEA) in measuring the efficiency level of each bank and comparative between the performance of domestic and foreign IBs in the country. The paper also employs the Malmquist Productivity Index to gauge the changes in its components between the same subjects and timeframe. The DEA results showed that the domestic Islamic banks are considered more efficient than most domestic Islamic banks outperforming the foreign Islamic banks. Banks like Hong Leong Islamic, Maybank Islamic, Public Islamic, and RHB Islamic are considered among the top performers for technical efficiency and scale efficiency. The study also found that based on the Malmquist Productivity Index, the least efficient banks based on DEA have improved in technical efficiency, technology, and total factor productivity (TFP).

scholarly journals MARKET POWER AND EFFICIENCY OF ISLAMIC BANKING AND CONVENTIONAL BANKING IN INDONESIA

2018 ◽  
Vol 6 (2) ◽  
pp. 131
Author(s):  
Chajar Matari Fath Mala ◽  
Ahmad Rodoni ◽  
Bahrul Yaman
Keyword(s):  
Market Power ◽  
Scale Efficiency ◽  
Islamic Banking ◽  
Data Envelopment ◽  
Islamic Banks ◽  
Economic Community ◽  
Banking Market ◽  
Asean Economic Community ◽  
Conventional Banks ◽  
Conventional And Islamic Banks

ASEAN Economic Community (AEC) of banking industry requires both Islamic and conventional banking to improve their efficiency because the competition in banking market industry will be more intense. Therefore, this study aims to identify the type of hyphotesis of industrial organization which exists in Islamic and conventional banks in order to investigate their readiness for AEC. The research sampling consists of 10 Islamic banks and 10 conventional banks from January 2009 to December 2016. To measure x-efficiency and scale efficiency, this research uses Data Envelopment Analysis (DEA). Meanwhile, the concentration is measured by Lerner index. The hypothesis is tested by using panel regression. The result shows SCP (Structure-Conduct-Performance) hypothesis is closely applied to Islamic and conventional banks because market concentration significantly influences profitability. RMP (Relative Market Power) hypothesis is also closely applied to Islamic and conventional banking, this indicates Indonesian banking has market power in determining prices and this condition makes the profit higher. RES (Relative Efficiency Structure) and SES (Scale Efficiency Structure) hypothesis do not exist in both conventional and Islamic banks because x-efficiency and scale efficiency do not affect profitability, concentration, and  market share simultaneously. Market power and efficiency researches are commonly conducted in conventional banking, however there are only a few research in Islamic banking area. The novelty of this study is the comparison between conventional and Islamic banking in the term of market structure and efficiency.

scholarly journals Pengukuran Kinerja Efisiensi Pérbankan Syariah: Analisis Empiris 15 Bank Syariah di Indonesia 2005-2007

2010 ◽  
Vol 10 (2) ◽  
pp. 175-191
Author(s):  
Endri Endri
Keyword(s):  
Parametric Method ◽  
Stochastic Frontier ◽  
Policy Implications ◽  
Scale Efficiency ◽  
Islamic Banking ◽  
Data Envelopment ◽  
Islamic Banks ◽  
Stochastic Frontier Approach ◽  
Banking Deregulation ◽  
Research Period

Using the non-parametric method of Data Envelopment Analysis (DEA) and the parametric method of Stochastic Frontier Approach (SPA), this study investigates the efficiency of the Islamic Banking recent operations in Indonesia over the period 2005 to 2007. In specifying input-output variables of Islamic banks, the intermediation approach is selected as it is in line with the principle of Islamic financial system. The attributions of technical efficiency (utilization of capacity) and scale efficiency (optimality of scale achieved) are identified. The principal findings for the period under study indicated that technical and scale efficiency scores are improving but 100 percent optimal during research period. According to SFA approach, closer to 100 percent means a bank acts efficiently. Overall, the result shows that Islamic banks suffer slight inefficiencies during the period 2005-2007, and tend to be increasing. The study has several important policy implications to offer, one of which is that it could be taken as a guideline for the Indonesian government to chart a policy on banking deregulation and mergers. Moreover, the study provides some information and identifies the sourceof inefficiency, vyhich could, in turn, be used to assist banks’ managements to overcome the problems of inefficiency.

scholarly journals Did Global Financial Crisis Impact the Islamic Banking Efficiencies? Evidence from Malaysian Islamic Banks

2018 ◽  
Vol 6 (2) ◽  
pp. 075
Author(s):  
Abdus Samad
Keyword(s):  
Financial Crisis ◽  
Technical Efficiency ◽  
Global Financial Crisis ◽  
Islamic Banking ◽  
Data Envelopment ◽  
Islamic Banks ◽  
Significant Difference ◽  
Loan Financing ◽  
The Global Financial Crisis ◽  
Non Parametric

First, this paper investigated the loan and deposit efficiencies of Malaysian Islamic banks during 2008-2013 applying the non-parametric technique, Data Envelopment Analysis (DEA), and found that the average technical efficiency (TE) of loan financing was 83%, 88%, 87%, 95%, 100%, and 94% and the average technical efficiency for deposit mobilizations was 87%, 94%, 94%, 96%, 92%, and 96%. Only four banks in 2008, two bank in 2009, three banks in 2010, two banks in 2011-2013 are both technically and scale efficient in loan production. On the other hand, only four banks in 2008 and 2009, five banks in 2010 and 2011, three banks in 2012, and five banks in 2013 are both technical and scale efficient in deposit mobilizations. Second, the paper compares the efficiencies of Islamic banks between the global financial crisis (GFC) and the post global financial crisis (PGFC) in determining whether the efficiencies of banks between the GFCP and PGFCP are stable. Both parametric and non-parametric tests found no significant difference in the efficiencies between the two periods suggesting that the efficiencies of the Malaysian Islamic banks were stable.

Efficiency analysis of Islamic banks in Pakistan

Humanomics ◽  
2016 ◽  
Vol 32 (1) ◽  
pp. 19-32 ◽  
Author(s):  
Muhammad Tariq Majeed ◽  
Abida Zanib
Keyword(s):  
Technical Efficiency ◽  
Design Methodology ◽  
Efficiency Analysis ◽  
Risk Exposure ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Islamic Banks ◽  
Data Set ◽  
Content Type ◽  
Conventional Banks

Purpose – This paper aims to empirically analyze the efficiency of full-fledged Islamic banks, Islamic branches of conventional banks and conventional banks in Pakistan. Design/methodology/approach – The paper uses data envelopment analysis to measure and compare the efficiency of banks. Three measures of efficiencies such as total technical efficiency, pure technical efficiency and scale efficiency are computed to achieve the objective of the paper. Findings – Overall, full-fledged Islamic banks are less efficient in terms of total technical efficiency and pure technical efficiency than conventional banks. However, Islamic branches of conventional banks are highly scale-efficient than their counterparts. Research limitations/implications – The findings need to be supported by considering production function and risk exposure factors. Originality/value – This paper evaluates and compares the efficiency of Islamic and conventional banks by utilizing the largest available data set during 2007-2014.

scholarly journals The Measurement of Innovation Efficiency of Chinese High-tech Industry Using Data Envelopment Analysis

2015 ◽  
Vol 65 (s2) ◽  
pp. 101-113 ◽  
Author(s):  
Ling Jiang ◽  
Yunyu Jiang ◽  
Zhijun Wu ◽  
Dongsheng Liao ◽  
Runfa Xu
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Environmental Variables ◽  
Scale Efficiency ◽  
High Tech ◽  
Data Envelopment ◽  
High Tech Industry ◽  
Economic Competitiveness ◽  
Development Level ◽  
Using Data

In the era of knowledge economy, a country’s economic competitiveness depends largely on the development level of high-tech industry. This paper evaluates the efficiency of China’s high-tech industry in 31 provinces in 2012 with data envelopment analysis. The empirical results are summarized as following. Firstly, when the effects of exogenous environmental variables are not controlled, the comprehensive technical efficiency of 31 provinces will be overestimated, the pure technical efficiency will be underestimated, and the scale efficiency value will be overestimated. Secondly, after eliminating the environmental impact, the comprehensive technical efficiency of 31 provinces with the average of 0.395 is rather low, due to the low scale efficiency.

scholarly journals Does Farm Size and Specialization Matter for Productive Efficiency? Results from Kansas

2011 ◽  
Vol 43 (4) ◽  
pp. 515-528 ◽  
Author(s):  
Amin W. Mugera ◽  
Michael R. Langemeier
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Production Technology ◽  
Returns To Scale ◽  
Productive Efficiency ◽  
Farm Size ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Sample Period ◽  
Analysis Techniques

In this article, we used bootstrap data envelopment analysis techniques to examine technical and scale efficiency scores for a balanced panel of 564 farms in Kansas for the period 1993–2007. The production technology is estimated under three different assumptions of returns to scale and the results are compared. Technical and scale efficiency is disaggregated by farm size and specialization. Our results suggest that farms are both scale and technically inefficient. On average, technical efficiency has deteriorated over the sample period. Technical efficiency varies directly by farm size and the differences are significant. Differences across farm specializations are not significant.

Efficiency evaluation of Indian oil and gas sector: data envelopment analysis

2019 ◽  
Vol 14 (2) ◽  
pp. 362-378 ◽  
Author(s):  
Vikas Vikas ◽  
Rohit Bansal
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Capital Investment ◽  
Oil And Gas ◽  
Stock Exchange ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Content Type ◽  
Indian Economy ◽  
Oil And Gas Sector

Purpose Data envelopment analysis (DEA), a non-parametric technique is used to assess the efficiency of decision-making units which are producing identical set of outputs using identical set of inputs. The purpose of this paper is to find the technical efficiency (TE), pure technical efficiency and scale efficiency (SE) levels of Indian oil and gas sector companies and to provide benchmark targets to the inefficient companies in order to achieve efficiency level. Design/methodology/approach In the present study, a group of 22 oil and gas companies which are listed on the National Stock Exchange for which the data were available for the period 2013–2017 has been considered. DEA has been performed to compare the efficiency levels of all companies. To measure efficiency, three input variables, namely, combined materials consumed and manufacturing expenses, employee benefit expenses and capital investment and two output variables – operating revenues and profit after tax (PAT) have been considered. On the basis of performance for the financial year ending 2017, benchmark targets based on DEA–CCR (Charnes, Cooper and Rhodes) model have been provided to the inefficient companies that should be focused upon by them to attain the efficiency level. The performance of the companies for the past five years has been examined to check the fluctuations in the various efficiency scores of the companies considered in the study over the years. Findings From the results obtained, it is observed that 59 percent, i.e. 13 out of 22 companies are technically efficient. By considering DEA BCC (Banker, Charnes and Cooper) model, 16 companies are observed to be pure technically efficient. In terms of SE, there are 14 such companies. The inefficient units need to improve in terms of input and output variables and for this motive, specified targets are assigned to them. Some of these companies need to upgrade significantly and the managers must take the concern earnestly. The study has also thrown light on the performance of the companies over last five years which shows Oil India Ltd, Gujarat State Petronet Ltd, Petronet LNG Ltd, IGL Ltd, Mahanagar Gas, Chennai Petroleum Corporation Ltd and BPCL Ltd as consistently efficient companies. Research limitations/implications The present study has made an attempt to evaluate the efficiency of Indian oil and gas sector. The results of the study have significant inferences for the policy makers and managers of the companies operating in the sector. The results of the study provide benchmark target level to the companies of Oil and Gas sector which can help the managers of the relatively less efficient companies to focus on the ways to improve efficiency. The improvement in efficiency of a company would not only benefit the shareholders, but also the investors and other stakeholders of the company. Originality/value In the context of Indian economy, very limited number of studies have focused to measure the efficiency of oil and gas sector in the context of Indian economy. The present study aims to provide the latest insight to the efficiency of the companies especially operating in the Indian oil and gas sector. Further, as per our knowledge, this study is distinctive in terms of analyzing the efficiency of Indian oil and gas sector for a period of five years. The longitudinal study of the sector efficiency provides a bird eye view of the average efficiency level and changes in the efficiency levels of the companies over the years.

scholarly journals Performance of Village Unit Co-Operatives in Yogyakarta Special Region: A Data Envelopment Analysis Approach

2017 ◽  
Vol 1 (2) ◽  
pp. 067
Author(s):  
Abi Pratiwa Siregar ◽  
Jamhari Jamhari ◽  
Lestari Rahayu Waluyati
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Best Practice ◽  
Negative Impact ◽  
Positive Impact ◽  
Three Dimensions ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Rice Milling ◽  
Special Region

This study assessed the performance of 32 village unit co-operatives (KUD) in Yogyakarta Special Region during 2011 to 2012. The efficiency level of the KUD were evaluated by employing the data envelopment analysis and multiple regression analysis using panel data to determine the factors affecting efficiency level. Efficiency analysis was decomposed into three dimensions to explore possible sources of inefficiency. According to Marwa and Aziakpono (2016), the first dimension was technical efficiency, which explored the overall effectiveness of transforming the productive inputs into desired outputs compared to the data-driven frontier of best practice. The second dimension was pure technical efficiency, which captured managerial efficiency in the intermediation process. The third dimension was scale efficiency, which explored whether KUD were operating in an optimal scale of operation or not. The results found that the average scores are 64%, 92%, and 68% for technical, pure technical, and scale efficiency respectively in 2011, while in 2012 the average scores are 57%, 94%, and 60% for technical, pure technical, and scale efficiency. Factors having significantly positive impact on several measures of efficiency are incentive and dummy variables (agriculture inputs and hand tractor). Accounts receivable only has positive relationship to pure technical efficiency. On the other hand, rice milling unit and electricity services have negative impact with several measures of efficiency.

Sign in / Sign up

Export Citation Format

Share Document