A Cobb Douglas Stochastic Frontier Model on Measuring Domestic Bank Efficiency in Malaysia

Hasan, Md. Zobaer; Kamil, Anton Abdulbasah; Mustafa, Adli; Baten, Md. Azizul

doi:10.1371/journal.pone.0042215

Cited by 30 publications

(30 citation statements)

References 17 publications

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“…Using SFA to measure the technical efficiency, Mohd Tahir, Abu Bakar and Haron (2008) found that the technical efficiency of commercial banks was high in the 2000-2006 period (around 81%). The findings were supported by Hasan et al (2012) who found the technical efficiency of domestic banks were higher than the previous findings (around 94%) over the period 2005-2010. There were also studies conducted to analyse the Islamic and conventional banks (Abdul-Majid, Saal & Battisti 2011; Ahmad Mokhtar, Abdullah & Al-Habshi 2006).…”

Section: Bank Efficiencysupporting

confidence: 64%

Bank Market Risk and Efficiency of Commercial Banks in Malaysia

Hamid

Abdul-Rahman²,

Mariani³

et al. 2017

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Since the global financial crisis, banking supervisors have realised that bank market risk is crucial to banking stability. Guided by the Financial Sector Master Plan, Bank Negara Malaysia has implemented risk-focused and pre-emptive regulation and supervision to control the market risk exposure. This paper examines the market risk and effects of cost and profit efficiencies on market risk using all listed banks in Malaysia for the 2000-2015 period. Using the Expected Shortfall and Stochastic Frontier Analysis, this paper estimates the cost and profit efficiencies and analyses the effects on market risk. The results show that the bank market risk exposure decreases and both cost and profit efficiencies affect market risk. Bank managers and supervisors could apply the results as a basis for formulating business strategy and developing banking policy.

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Section: Bank Efficiencysupporting

confidence: 64%

Bank Market Risk and Efficiency of Commercial Banks in Malaysia

Hamid

Abdul-Rahman²,

Mariani³

et al. 2017

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“…But in terms of cost, international banks are the most efficient. Tahir and Haron (2008) used stochastic frontier analysis to estimate 22 conventional banks (9 domestic banks and 13 foreign banks) in Malaysia from consistent with Hasan et al (2012), which found that conventional bank's technical efficiency in Malaysia was 94 percent in 2005 until 2010. In addition, Tahir and Haron (2008) found that domestic banks are more efficient than foreign banks.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Over the last few years, there have been many empirical studies measuring the technical efficiency of banking industry with stochastic frontier analysis. Some of these studies are by Bhattacharyya and Pal (2013), Hasan et al (2012), Hosen and Muharri (2013), Ngan (2014), Tahir and Haron (2008) and Zuhroh et al (2015).…”

Section: Introductionmentioning

confidence: 99%

Efficiency of Islamic Rural Banks (BPRS) in East Java Province, Indonesia

Sadono

2018

TIFBR

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This study aims to measure technical efficiency and identify factors that affect technical inefficiency of Islamic rural banks (BPRS) in East Java Province, Indonesia. We also want to test whether BPRS operating in districts are more efficient than those operating in cities. Data that we use are unbalanced panel data from 2011 until 2016 using stochastic frontier analysis. This study has successfully identified that the technical efficiency of BPRS operation is 90.12 percent. It means that there is still about 9.88 percent that can be optimized to improve their performance. Factors that cause technical inefficiency are Capital Adequacy Ratio (CAR) and Net Performing Financing (NPF). To improve technical efficiency of BPRS operations, the effort that must be made is to ensure each BPRS has sufficient capital stock to be channeled into loans. In addition, BPRS should also ensure the risks of bad loans are minimum.

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“…The concept of efficiency is related to the measurement of an output for a given level of input, and this concept can be applied to banking operations (Saha & Ravisankar, 2000). In this sense, an efficient bank is one that obtains maximum levels of output for a given level of input, or one that is able to minimize the inputs used for a given level of output (Hasan, Kamil, Mustafa, & Baten, 2012).…”

Section: Introductionmentioning

confidence: 99%

Evaluation of Bank Efficiency in Brazil: A Dea Approach

Cava

Salgado

Branco

2016

RAM, Rev. Adm. Mackenzie

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Este artigo pode ser copiado, distribuído, exibido, transmitido ou adaptado desde que citados, de forma clara e explícita, o nome da revista, a edição, o ano, e as páginas nas quais o artigo foi publicado originalmente, mas sem sugerir que a RAM endosse a reutilização do artigo. Esse termo de licenciamento deve ser explicitado para os casos de reutilização ou distribuição para terceiros. Não é permitido o uso para fins comerciais. The research aims to evaluate the efficiency of banks that operated in the Brazilian market in 2013. To achieve this goal, efficient banks were identified according to the production approach. To detect and explain efficiency standards, additional analyses were carried out related to: 1. capital origin, 2. size, 3. business segment, and 4. risk rating. Originality/gap/relevance/implications: The Brazilian literature on bank efficiency features several studies linking the efficiency of banks to capital origin and size. However, the relationship between efficiency and business segment has been poorly explored and the relationship between efficiency and risk rating is scarce. In this sense, this research contributes to the literature by exploring the relationship between efficiency and business segment, as well as the relationship between efficiency and risk rating.ISSN 1518-6776 (impresso) • ISSN 1678-6971 (on-line) • http://dx.doi.org/10.1590/1678-69712016/administracao.v17n4p61-83. Submissão: 24 abr. 2015. Aceitação: 1º fev. 2016. Sistema de avaliação: às cegas dupla (double blind review Key methodological aspects:The research uses a quantitative approach and employs the Data Envelopment Analysis (DEA) technique to calculate efficiency scores. The data were obtained from the Central Bank of Brazil (Bacen). Summary of key results:Federal public banks and large banks are, on average, more efficient. Banks operating in foreign exchange and retail, as well as banks with high credit ratings, also achieved high levels of efficiency. Key considerations/conclusions: Efficient banks proved to be more profitable, lent less money in proportion to their total assets, and received fewer complaints filed with the Central Bank of Brazil in 2013.

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A Cobb Douglas Stochastic Frontier Model on Measuring Domestic Bank Efficiency in Malaysia

Cited by 30 publications

References 17 publications

Bank Market Risk and Efficiency of Commercial Banks in Malaysia

Bank Market Risk and Efficiency of Commercial Banks in Malaysia

Efficiency of Islamic Rural Banks (BPRS) in East Java Province, Indonesia

Evaluation of Bank Efficiency in Brazil: A Dea Approach

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