Purpose – This study aims to measure the efficiency level of Indonesian Banking in the period 2015-2020, especially in the year 2020 when the Covid-19 pandemic began to spread in Indonesia. In addition, the efficiency determinant was further analyzed to find some factors that affect banking efficiency.Methodology – Non-parametric approach-Data Envelopment Analysis (DEA) and Tobit Regression were employed as the research methods to determine determinants that affect efficiency level.Findings – The findings show that the efficiency level of Indonesian Banks experienced a decreasing trend in 2020. The impact of Covid-19 on banking efficiency was also confirmed by RTS, which was included in the Decreasing Return to Scale (DRS) category. Islamic banking scored a higher score of 0.66 than conventional banking, with a score of 0.59. In addition, Indonesian Banks' most crucial variable to be improved during the pandemic is total financing. This study also found that ROA and LDR/FDR significantly affects banking efficiency. Therefore, Indonesian Banks should maintain and increase their bank profitability and financing distributions to improve their efficiency.Implication – This research can be used as guidelines for policymakers, especially bank management, to improve their weaknesses in terms of banking efficiency. Originality – This study was the first research that focuses on measuring the efficiency of Islamic banks compared to conventional banks in Indonesia during the Covid-19 and precisely measures the bank's internal factors affecting bank efficiency.
Purpose − This study aims to measure and compare the efficiency of Islamic and conventional banks in Indonesia and Malaysia, from 2015 to 2020.Methodology − Data Envelopment Analysis (DEA) was employed as a research method for measuring efficiency. The DEA results are also used to identify input or output variables that must be improved if the Decision-Making Unit (DMU) needs to improve efficiency in form of potential improvement.Findings − This study shows that Covid-19 had an impact on decreasing the efficiency level of Indonesian and Malaysian Banks. This study also shows that Indonesian Banks are relatively efficient compared to Malaysian Banks. Nevertheless, Islamic bank is more affected by Covid-19 compared to conventional. In addition, the most important variable performance to be improved by banks during the Covid-19 pandemic is total financing.Implication − It can be used as a guideline for both nations to improve their shortcomings in each type of bank and to strengthen the banking system during economic downturns in order to speed up the recovery process.Originality − This is the initial study to examine the banking efficiency of Indonesia and Malaysia during the covid pandemic-induced economic crisis. As a result, it is expected to capture the impact of the covid-19 epidemic on banking efficiency.
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