scholarly journals Forced Mergers on Bank Efficiency and Productivity: Evidence from Semi-parametric Malmquist Productivity Index

2017 ◽  
Vol 18 (1) ◽  
pp. 19-44 ◽  
Author(s):  
Fadzlan Sufian ◽  
Fakarudin Kamarudin
Keyword(s):  
Banking Sector ◽  
Conclusive Evidence ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Bank Efficiency ◽  
Productivity Level ◽  
The Difference ◽  
Two Stages ◽  
The Impact ◽  
Efficiency And Productivity

The paper examines the impact of mergers and acquisitions on the productivity of the Malaysian banking sector. The analysis consists of two stages. Firstly, the semi-parametric Malmquist productivity index (MPI) method is applied to a [-5, +8] window to examine the efficiency and productivity of the acquiring and target banks during the pre- and post-merger periods. Secondly, as suggested by Banker and Natarajan (2008), we employ a battery of parametric and non-parametric univariate tests to examine the difference in the efficiency and productivity of the Malaysian banking sector during the pre- and post-merger periods. We find that the Malaysian banking sector has exhibited a higher total factor productivity level during the post-merger period attributed to technological progress. The empirical findings do not provide conclusive evidence on the less productive banks becoming the target for acquisitions.

Impact of merger on efficiency and productivity : a case study of commercial banks in Malaysia

1970 ◽  
Vol 5 (1) ◽  
pp. 77
Author(s):  
Mahadzir Ismail ◽  
Saliza Sulaiman ◽  
Hasni Abdul Rahim ◽  
Nordiana Nordin
Keyword(s):  
Efficiency Score ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Data Envelopment ◽  
Master Plan ◽  
Before And After ◽  
Domestic Banks ◽  
The Impact ◽  
Efficiency And Productivity

The Financial Master Plan (2001- 2010) aims to enhance the capacity of banking industry so that higher effic iency and productivity can be reaped in the future. This study seeks to determine the impact of merger on the efficiency and productivity ofcommercial banks in Malaysia for the period 1995 until 2005. The study uses a non-parametric approach, nam ely DEA (data envelopment analysis?) to estimate the efficiency scores and to construct the Malmquist productivity index. To enable this estimation, three bank inputs and outputs are used. Amongst the findings are those banks exhibit higher efficiency score after the merger and thefo reign banks are more efficient than the local banks. Productivity of the banks is calculated in both periods, before and after the merger: The results show that, it is the local banks that have improved the most after the merger. The main source of productivity is technical change or innovation. The findings support the existing policy of having larger domestic banks in term of size.

The Relationship between Intellectual Capital and Banks' Productivity in Pakistan

2021 ◽  
pp. 158-169
Author(s):  
Muhammad Asim Afridi ◽  
Imran Khan ◽  
Muddassar Khan
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Productivity Growth ◽  
Banking Sector ◽  
Value Added ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Structural Capital ◽  
Capital Efficiency ◽  
The Impact

The performance of banks has been widely researched using accounting ratios, Tobin�s Q and market returns and less emphasis has been given to productivity measures. The productivity growth of banks is captured through Malmquist Productivity Index (MPI). The study then investigates the impact of intellectual capital on the productivity of banks in Pakistan. Value-added The intellectual Coefficient (VAIC) approach is employed to examine the intellectual capital of banks. Data is obtained from annual reports of 20 banks listed on the Pakistan Stock Exchange for 10 years (2007-2016). The panel corrected standard error approach is used for estimating the panel regression model. The findings provide evidence that the VAIC, human capital efficiency (HCE) and structural capital efficiency (SCE) has a positive impact on productivity growth (MPI). On the other hand, capital employed efficiency (CEE) has no significant impact on productivity growth. The VAIC approach may be useful for the banks and policymakers in a knowledge economy to integrate the intellectual capital in the decision-making process. Our results also suggest that banks in Pakistan shall increase spending on intellectual capital particularly on human capital and structural capital to elevate the intellectual capital of banks and subsequently get benefits in terms of increased productivity Keywords: Intellectual capital; Value added intellectual coefficient (VAIC); Malmquist productivity Index; Pakistan banking sector

scholarly journals Analisis Produktivitas dan Faktor-Faktor yang Memengaruhi Efisiensi Asuransi Syariah di Indonesia: Suatu Kajian Empiris

Al-Muzara ah ◽  
2020 ◽  
Vol 8 (2) ◽  
pp. 153-171
Author(s):  
Dede Iskandar ◽  
Noer Azam Achsani ◽  
Setiadi Djohar
Keyword(s):  
Market Share ◽  
Life Insurance ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Insurance Companies ◽  
Productivity Analysis ◽  
Productivity Level ◽  
General Insurance ◽  
Islamic Insurance ◽  
Efficiency And Productivity

Market share on Islamic Insurance is still very small compared to conventional insurance. Islamic insurance companies must be able to compete with conventional insurance in order to increase their market share. Efficiency and Productivity are factors that must be improved so that Islamic insurance can compete with conventional insurance. This study aims to analyze the level of efficiency and productivity of Islamic insurance during the 2016-2018 period. The study was conducted on 48 Islamic insurance companies consisting of 26 Islamic life insurance companies and 22 Islamic general insurance companies. Efficiency analysis use the Data Envelopment Analysis (DEA) approach and productivity analysis use the Malmquist Productivity Index (MPI). The novelty of this study, among others, involves Islamic general insurance in the productivity analysis which has not been studied so far. The results of the analysis shows that the majority of Islamic life insurance and Islamic general insurance are inefficient during the 2016-2018 period. The size of the company which represents the total assets is the factor that have a positive and significant effect on the efficiency value. The results of the productivity analysis shows that the productivity level of both sharia life insurance and general sharia insurance during the 2016-2018 period is influenced by technological change factors.

scholarly journals The Impact of International Trade on Central Bank Efficiency: An Application of DEA and Tobit Regression Analysis

2021 ◽  
Vol 9 (1) ◽  
pp. 223-240
Author(s):  
Qaiser Farooq Dar ◽  
Young-Hyo Ahn ◽  
Gulbadin Farooq Dar
Keyword(s):  
Regression Analysis ◽  
International Trade ◽  
Central Bank ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Productivity Change ◽  
Tobit Regression ◽  
Bank Efficiency ◽  
Tobit Regression Analysis ◽  
The Impact

The purpose of this study is to introduce a novel methodology to measure the central bank efficiency. The data envelopment analysis (DEA) applies in the combination of three input and two output variables characterizing the economic balance in international trade.  Super-efficiency DEA model is applied for ranking & comparing the efficiency of different central banks. In contrast, the Malmquist productivity index (MPI) is used to measure the productivity change over the period of time. Further, the study is extended to quantify the impact of international trade dimension on the efficiency of the central bank by using Tobit regression analysis. Finally, based on our data analysis, we reported that the efficiency changes over the period of time and the total productivity changes significantly due to the technology shift as compared to efficiency change. Additionally, it is also observed that the central bank efficiency is impacted dramatically by the export level of the country as compared to import level, average exchange rate and GDP. It implies that the export level of the country significantly influences the performances of the central bank.

scholarly journals Economic freedom and bank efficiency: does ownership and origins matter?

2014 ◽  
Vol 22 (3) ◽  
pp. 174-207 ◽  
Author(s):  
Fadzlan Sufian ◽  
Muzafar Shah Habibullah
Keyword(s):  
Empirical Evidence ◽  
Economic Freedom ◽  
Banking Sector ◽  
Negative Impact ◽  
Bank Efficiency ◽  
Content Type ◽  
Government Interventions ◽  
Money Markets ◽  
Two Stages ◽  
The Impact

Purpose – The paper aims to explore the impact of economic freedom on the efficiency of the Malaysian banking sector. Design/methodology/approach – The analysis is confined into two stages. In the first stage, the bias-corrected data envelopment analysis method is used to compute the efficiency of individual banks. Then bootstrap regressions are used to examine the impact of economic freedom on bank efficiency, while controlling for the potential impacts of contextual variables. Findings – It was found that greater freedom to start new businesses tend to impede the efficiency of banks operating in the Malaysian banking sector. The results indicate that restrictions on the activities of which banks could undertake exert negative impact on their efficiency levels. The empirical findings seem to support for official regulation and supervision of banks by setting the limits on activities which banks could undertake. In addition evidence supporting for government interventions in the foreign exchange and money markets was found. Originality/value – The purpose of the present paper is to extend the earlier works on the performance of the banking sector in a developing economy and establish empirical evidence on the impact of economic freedom. Although empirical evidence which examines the performance of banking sectors is abundant in the literature, to the best of our knowledge, virtually nothing has been published to address the impact of economic freedom.

scholarly journals EFFICIENCY AND PRODUCTIVITY CHANGE ACROSS THE ECONOMIC SECTORS IN LITHUANIA (2000–2010): THE DEA–MULTIMOORA APPROACH

2014 ◽  
Vol 19 (Supplement_1) ◽  
pp. S191-S213 ◽  
Author(s):  
Tomas Baležentis ◽  
Algimantas Misiūnas ◽  
Alvydas Baležentis
Keyword(s):  
Value Added ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Productivity Change ◽  
Data Envelopment ◽  
Economic Sectors ◽  
Services Sector ◽  
Intermediate Consumption ◽  
The Impact ◽  
Efficiency And Productivity

Reasonable strategic management requires the complex assessment of the regulated area. This study, thus, presents a multi-criteria framework for frontier assessment of efficiency and productivity across the Lithuanian economic sectors throughout 2000–2010. The data envelopment analysis was employed to estimate efficiency in terms of an output indicator (value added) and input indicators (intermediate consumption, capital consumption, and remunerations). Furthermore, the decomposition of the Malmquist productivity index enabled to describe the impact of frontier shifts and catch-up effect on the overall change in efficiency. The multi-criteria decision making method MULTIMOORA aggregated different indicators of efficiency and productivity and thus resulted in the ranking of the economic sectors. The analysis suggests that services sector was the most efficient one, whereas manufacturing was second best. Certain branches of manufacturing, namely pharmaceutical, wood, food, and furniture industry, were rather efficient.

Does productivity of Islamic banks endure progress or regress?

Humanomics ◽  
2017 ◽  
Vol 33 (1) ◽  
pp. 84-118 ◽  
Author(s):  
Fakarudin Kamarudin ◽  
Chiun Zack Hue ◽  
Fadzlan Sufian ◽  
Nazratul Aina Mohamad Anwar
Keyword(s):  
Banking Sector ◽  
Southeast Asian ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Asian Countries ◽  
Productivity Level ◽  
Content Type ◽  
Southeast Asian Countries

Purpose This paper aims to explore the level of productivity of Islamic banks specifically in selected Southeast Asian Countries from the period 2006 to 2014. Besides, this study also investigates the potential determinants of bank-specific characteristics and macroeconomic conditions that may influence the productivity of banking sector. Design/methodology/approach The present study gathers data on the 29 Islamic banks from Southeast Asian countries, namely, Brunei, Indonesia and Malaysia. The productivity level of the Islamic banks is evaluated using the data envelopment analysis-based Malmquist productivity index method. The authors then used a panel regression analysis framework based on the ordinary least square to identify potential determinants. Findings The domestic and foreign Islamic banks have exhibited progress in total factor productivity change solely attributed to the increase in efficiency change (EFFCH) which were mainly managerial rather than scale related. Foreign-owned banks have been slightly more productive compared to their domestic-owned bank counterparts, attributed to a higher EFFCH but insignificantly different. Furthermore, capitalisation, liquidity and world financial crisis determinants have significantly influenced productivity level of Islamic banks. Originality/value The study on the productivity of Islamic banking is still in its formative stage. To date, very limited study has been conducted to examine the productivity level in Southeast Asian, which is a strong regional hub for Islamic banking. This study intends to fill the gaps with a specific focus on the productivity level, specifically narrowing down to Southeast Asian countries in the domestic and foreign Islamic banking sector.

Does country governance and bank productivity Nexus matters?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fakarudin Kamarudin ◽  
Nazratul Aina Mohamad Anwar ◽  
Annuar Md. Nassir ◽  
Fadzlan Sufian ◽  
Khar Mang Tan ◽  
...  
Keyword(s):  
Global Financial Crisis ◽  
Political Stability ◽  
Ordinary Least Squares ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Islamic Banks ◽  
Productivity Level ◽  
Content Type ◽  
Conventional Banks ◽  
The Impact

Purpose This study aims to examine the impact of country governance and other potential bank-specific characteristics and macroeconomic condition determinants on bank productivity in the period of 2006–2016. Design/methodology/approach The productivity level of total 167 banks selected from Malaysia, Indonesia, Brunei and Singapore are evaluated using the data envelopment analysis-based Malmquist productivity index method. A panel regression analysis framework based on ordinary least squares, a fixed effect and a random effect models then are used to identify its main determinants. Findings The empirical findings indicate that the total factor productivity changes of Islamic banks is higher than conventional banks. The liquidity and global financial crisis influence both banks’ productivity. Bank size, credit risk, market power, management efficiency and inflation merely influence Islamic banks’ productivity. On the country governance dimensions, voice and accountability are found to positively influence both banks’ productivity. Regulatory quality and rule of law (RL) significantly influences the conventional parts. Political stability and absence of violence, government effectiveness, RL and control of corruption negatively influence the banks’ productivity, but this influence is only significant for the Islamic banks. Originality/value Country governance has received surprisingly little attention in the banking industry over the past few decades. Majority of the studies that examine the effect of governance on bank performance have focused more on the micro governance dimension. Thus, to the best of the researcher’s knowledge, no study has been done to address the effect of country governance on the productivity of the Islamic and conventional banks.

Does globalisation have an impact on dual banking system productivity in selected Southeast Asian banking industry?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ribed Vianneca W Jubilee ◽  
Fakarudin Kamarudin ◽  
Ahmed Razman Abdul Latiff ◽  
Hafezali Iqbal Hussain ◽  
Nazratul Aina Mohamad Anwar
Keyword(s):  
Southeast Asia ◽  
Banking Sector ◽  
Banking Industry ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Panel Regression ◽  
System Productivity ◽  
Content Type ◽  
The Impact ◽  
Conventional Bank

PurposeGlobalisation has influenced many countries, over the last few decades with financial globalisation and liberalisation bringing regulatory reforms in the banking sector. Thus, this study aims to fill a gap in the literature by examining the influence of globalisation on Islamic and conventional bank productivity in Southeast Asia.Design/methodology/approachThe sample comprised 155 banks (23 Islamic and 132 conventional) from 4 countries from 2008 to 2017. Panel data techniques will be used, together with data envelopment analysis (DEA)-based Malmquist productivity index (MPI), to investigate the impact of chosen main determinants on bank productivity. A panel regression analysis will be performed after generating the productivity index from the DEA-based MPI frontier.FindingsAccording to the findings, Islamic banks are statistically significantly more productive than conventional banks, and the findings of the t-test are corroborated by the findings of nonparametric tests. Furthermore, the findings of the panel regression model reveal that bank specific factors and macroeconomic variables are significant determinants to bank productivity. Surprisingly, the findings also show that the influence of social globalisation elements tends to be negatively related to conventional bank productivity.Originality/valueThis study adds to the existing literature by bridging the globalisation gap in the productivity of the dual banking industry, particularly in the specific context of Southeast Asia, given that the area is representative of Islamic and finance globally.

scholarly journals The Impact of Monitoring Mechanism on Efficiency Change and Productivity Growth of Private Commercial Banks in Bangladesh

2021 ◽  
Vol 17 (5) ◽  
Author(s):  
Naznin Sultana Chaity ◽  
S.M. Shafiul Alam
Keyword(s):  
Commercial Banks ◽  
Hypothesis Test ◽  
Returns To Scale ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Monitoring Mechanism ◽  
Increase Productivity ◽  
The Impact ◽  
Constant Returns To Scale ◽  
Efficiency And Productivity

This paper focuses on understanding the effects of monitoring mechanism (i.e., board quality as well as ownership structure) on efficiency and productivity changes of private commercial banks in Bangladesh over the period from 2007 to 2016. Two non-parametric methods - data envelopment analysis and malmquist productivity index - were used to determine the efficiency and productivity of private commercial banks in Bangladesh. Based on constant returns to scale, five inputs and two outputs have been used to determine the efficiency scores and to identify any improvement in productivity over the period. It was found that private commercial banks of Bangladesh are at the efficiency level of 80.84%. The productivity of all private commercial banks does not follow any trend. Out of twenty two (22) PCBs, only nine (9) banks could manage to increase productivity. Hypothesis test (one sample t-test) are conducted to validate the results. The impact of stock market crisis period on the overall productivity and efficiency of the banks is also evident.

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