Financial efficiency analysis in Islamic banks:

Abstract

This study uses Data Envelopment Analysis for the efficiency measurements while using the Malmquist Total Factor Productivity Index in order to measure the total factor productivity change. This study involves 4 Islamic banks operating in Turkey and 13 Islamic banks operating in Malaysia. Half of these Islamic banks operating in Turkey and Malaysia meet the technical productivity (CCR) value. In other words, half of these Islamic banks are able to use their Total Assets and Total Equities efficiently. It was found that the Technical Efficiency Change (EFFCH) value of the Islamic banks was never recorded above 1 for any time period. It was found that the Islamic Banks are unlikely to reach the production limit.

Efficiency and Stability of Islamic Banking in Asean: Dea Window Analysis

“…According to Wu et al (2006) DEA is one of the methods commonly used by researchers. This method is able to produce efficiency scores that reflect input and output variables (Yildirim, 2015).…”

Sophisticated strategic information systems and strategic performance of Islamic banks: a review of literature

“…Contemporary information system (IS) researchers have increasingly directed interest and attention towards the link between information systems investment and organisational performance as many information systems studies have focused on the relationship between information systems sophistication (diversity and complexity in the use of IS) and organisational performance and found that information systems sophistication have positive impact on organisational performance (Salleh et al, 2010;Yildirim, 2015). A study on the relationship between information systems sophistication and performance measurement systems (Salleh et al, 2010) indicates that information systems sophistication is a determinant of performance measures.…”

“…Although previous studies have revealed that Islamic banks are less efficient in managerial productivity and technological adoption as compared with the conventional banks (Norbaizura et al, 2014). Notwithstanding, Islamic banks have been making efforts to adopt technology in order to attain higher productivity level for the purpose of improved performance as a result of the increased global competitiveness (Yildirim, 2015). However, the major problem of information systems adoption by Islamic banks is closely associated with lack of standards that define a real compliant Shari'ah system of banking due to a difference in Shari'ah interpretation in most countries and across most regions and sometimes within the country, depending on their individual Shari'ah advisor and his interpretation (Kuppusamy et al, 2009;Rahim and Zakaria, 2016).…”

Productivity of Islamic Banking in Indonesia

“…Research about Islamic bank productivity using the Malmquist index hasn't been done yet, especially in Indonesia, compared to conventional bank research. But several types of research related to Islamic bank productivity have been done, amongst is Abbas did research uses DEA method and Malmquist index in Islamic banking in Pakistan during 2005-2009 indicates that bank productivity is higher in 2005 until 2006 and 2008-2009. Research related to Islamic banking productivity also done by Yildirim (2015) on Islamic banking in Turkey and Malaysia, research result shows that bank productivity isn't affected by technical Efficiency Change (EFFCH). This result indicates that bank managerial efficiency hasn't been able to do banking activity properly.…”