Bank competition and efficiency: empirical evidence from Indian market

Arrawatia, Rakesh; Misra, Arun; Dawar, Varun

doi:10.1108/ijlma-03-2014-0029

Cited by 32 publications

(42 citation statements)

References 33 publications

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“…The heightened of competition should encourage banks to reduce operating costs and, hence, eliminate inefficiencies in the banking industry (Turan, 2015). Arrawatia, Misra, & Dawar (2014) also found that competition positively effects efficiency and vice-versa. Then it needs to be examined whether the Islamic bank in ASEAN is efficient enough to face the tightening competition.…”

Section: Introductionmentioning

confidence: 99%

Data Envelopment Analysis (Dea) Efficiency of Islamic Banks in Asean: A Cross-Country Comparative Examination of Intermediation and Production Efficiency Aproach

et al. 2019

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In 2015 ASEAN leaders agreed to form an integrated market called ASEAN Economic Community (AEC) that enables countries in Southeast Asia to trade goods and services more easily, attracting strong demand from investors and heightened the competition in the industry. The heightened of competition should encourage banks to reduce operating costs and, hence, eliminate inefficiencies in the banking industry. The objective of this study is to examine the relative efficiency scores of Islamic banks across six countries in ASEAN from 2011 to 2018. The study implement Data Envelopment Analysis under the intermediation and production approach. Despite the rapid growth of the Islamic banking, examination of Islamic banks at a cross-country level is still at its infancy, especially in ASEAN. Therefore, this research aims to fill the gap in the literature by providing the empirical evidence on the efficiency of Islamic banks in ASEAN during 2011-2018. The analysis is divided into two frontiers, namely single-multiyear frontier to examine the efficiency trends of all ASEAN countries in eight years and cross-sectional frontier to compare the efficiency of countries in ASEAN per year. The single multi-year frontier shows that the Philippines, Malaysia, Thailand and Singapore presents positive trend efficiency, while Indonesia fell, and Brunei fluctuated. Cross-sectional frontier shows that Brunei is the country that is most frequent in achieving optimum efficiency. Furthermore, the higher the efficiency of an Islamic banking industry, the more it's contributes to society and the economy as a whole Abstrak: Pada tahun 2015 para pemimpin ASEAN sepakat untuk membentuk pasar terpadu yang disebut Masyarakat Ekonomi ASEAN (MEA) yang memungkinkan negara-negara di Asia Tenggara untuk berdagang barang dan jasa dengan lebih mudah, menarik permintaan kuat dari investor dan meningkatkan persaingan di negara-negara tersebut. industri. Tingginya kompetisi mendorong bank untuk mengurangi biaya operasional dan, karenanya, menghilangkan inefisiensi dalam industri perbankan. Tujuan dari penelitian ini adalah untuk menguji skor efisiensi relatif bank-bank Islam di enam negara di ASEAN dari 2011 hingga 2018. Studi ini mengimplementasikan Analisis Envelopment Data di bawah pendekatan intermediasi dan produksi. Meskipun pertumbuhan perbankan syariah cepat, pemeriksaan bank-bank Islam di tingkat lintas negara masih dalam masa pertumbuhan, terutama di ASEAN. Oleh karena itu, penelitian ini bertujuan untuk mengisi kesenjangan dalam literatur dengan memberikan bukti empiris pada efisiensi bank syariah di ASEAN selama 2011-2018. Analisis ini dibagi menjadi dua perbatasan, yaitu perbatasan tunggal-multi-tahun untuk menguji tren efisiensi semua negara ASEAN dalam delapan tahun dan perbatasan lintas bagian untuk membandingkan efisiensi negara-negara di ASEAN per tahun. Perbatasan tunggal multi-tahun menunjukkan bahwa Filipina, Malaysia, Thailand, dan Singapura menghadirkan efisiensi dengan tren positif, sementara Indonesia menurun, dan Brunei berfluktuasi. P...

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Section: Introductionmentioning

confidence: 99%

Data Envelopment Analysis (Dea) Efficiency of Islamic Banks in Asean: A Cross-Country Comparative Examination of Intermediation and Production Efficiency Aproach

et al. 2019

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“…Granger causality test investigates whether competition (C) results in efficiency (E) :( C  E) or efficiency results in competition (E  C) or both influence each other (C E). Granger Causality is denoted as follows (Arrawatia, et al, 2014):…”

Section: Resultsmentioning

confidence: 99%

Technical Efficiency and Competition Level of Indonesia Banking in Microfinance Market

Pandi

Purwanto

Irwanto

2018

JAM

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The purpose of this study are to find the relationship between SME credit competitions with the technical efficiency of banking. It involves banking statistics data from commercial banks and rural banks. Panzar-Rosse model was applied to measure a level of competition while the efficiency was determined using Data Envelopment Analysis (DEA). Data panel regression was utilized to analyze the Panzar-Rosse model coefficient while the efficiency score was obtained by using linear programming. The relevance of competition and efficiency was explored using the Granger causality test. Research result shows competition among BPRs inside a perfect competition market has an impact on their technical efficiency. A better competition between BPRs in a perfect competition market impact to lower technical efficiency. BPR competition with commercial banks occurred in a monopolistic market. In the monopolistic market, better technical efficiency would lower the competition. Technical efficiency score when commercial banks entered the competition revealed a climb score.

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“…Or the study of [10] uses data enveloping method (DEA) to measure the technical efficiency of banks in countries of Vietnam, Thailand, Malaysia, Philippines, Indonesia 1998 -2004. [11] use the DEA approach to estimate the effectiveness of the Indian banking system.…”

Section: Technical Efficiency Of Commercial Banksmentioning

confidence: 99%

Technical Efficiency of Vietnamese Commercial Banks

Tuan¹

2020

AJTAB

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The objective of this study is to analyze the technical efficiency of commercial banks operating in Vietnam, with an analysis of 30 out of 44 existing commercial banks. The author uses a parametric method with a Stochastic Frontier Analysis (SFA) with independent variables including equity, customer deposits, loans and total operating costs, and the dependent variable is total operating income. The results show that the mean technical efficiency of Vietnamese commercial banks in the research period is 0.728, the lowest efficiency is 0.692, the highest efficiency is 0.761. The technical efficiency of Vietnamese commercial banks in this period is low, the reason for the low efficiency of Vietnamese banks is that during this period, the Vietnamese banking system has just gone through a difficult period 2008-2012 and the Government of Vietnam restructured the banking system and credit institutions. Among commercial banks that are operating in weak cases, they are forced to restructure by mergers, acquisitions... this affects the overall average efficiency of the entire Vietnamese commercial banking system. The research results also show that the group of foreign banks has the highest average technical efficiency, with an average efficiency of 0.85. The group of state-owned commercial banks with average efficiency ranked second, this group having an average technical efficiency of 0.76. The group of private banks with the lowest average efficiency, this group has an average efficiency of 0.71. Foreign banks in Vietnam are subsidiary banks owned by major banking groups in the world such as HSBC, Shinhanbank, Standard Chartered.... These banks have advantages in capital, experience, and energy. governance, banking technology advantages... should have the highest operational efficiency. State-owned banks have a longer history of development than private banks, have capital from the state and have incentives from the government... so they are more effective than private banks. in Viet Nam.

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Bank competition and efficiency: empirical evidence from Indian market

Cited by 32 publications

References 33 publications

Data Envelopment Analysis (Dea) Efficiency of Islamic Banks in Asean: A Cross-Country Comparative Examination of Intermediation and Production Efficiency Aproach

Data Envelopment Analysis (Dea) Efficiency of Islamic Banks in Asean: A Cross-Country Comparative Examination of Intermediation and Production Efficiency Aproach

Technical Efficiency and Competition Level of Indonesia Banking in Microfinance Market

Technical Efficiency of Vietnamese Commercial Banks

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