The X-Efficiency of Shariah and Conventional Banking’s in Indonesia
DOI:
https://doi.org/10.21632/irjbs.13.2.149-159Keywords:
X-efficiency, DEA, Shariah and conventional banksAbstract
This paper investigates the X-efficiency of fifteen commercial banks in Indonesia consisting of seven Shariah banks and eight conventional banks. This study uses three stages of data analysis: non-parametric data envelopment analysis (DEA) approach, t-test, and multiple regression method. The results show that in the period of this study, both Shariah and conventional banks in Indonesia have not reached the optimal level of efficiency. However, conventional banks obtain a higher level of allocative and total efficiency compared to Shariah banks. The inefficiency of Islamic banks is stemed from allocative inefficiency rather than technical problems. The bank’s X-efficiency is significantly influenced by size, rather than number of banking channels and staff costs. This study provides important implications for Shariah banking in order to improve X- efficiency and compete in the banking industry in Indonesia by focusing on the improvement of the combination of quality assets.
References
Amirillah, M. A. (2010). Efisiensi Perbankan Syariah di Indonesia Tahun 2005-2009. Doctoral dissertation: Universitas Diponegoro.
Bank Indonesia. (2011). Statistik Perbankan Syariah. Jakarta
Bank Indonesia. (2015). Statistik Perbankan Syariah. Jakarta
Berger, A. N., & Humphrey, D. B. (1991). The dominance of inefficiencies over scale and product mix economies in banking. Journal of Monetary Economics, 28(1), 117-148.
Charnes, A., W. Cooper, and E. Rhoades (1978) Measuring Efficiency of Decision Making Units. European Journal of Operational Research 2, 429–44
Firdaus, M. F., & Hosen, M. N. (2013). Efisiensi Bank Umum Syariah Menggunakan Pendekatan Two-Stage Data Envelopment Analysis. Buletin Ekonomi Moneter dan Perbankan, October
Hadad, M.D, M.JB. Hall, K. Kenjegalieva, W. Santoso, R. Satria and R. Simper (2008). Efficiency in Indonesian Banking : Recent Evidence. Departement of Economics Loughborough University Working Paper 13
Hassan, Kabir M. (2006). The X-Efficiency in Islamic Banking. Islamic Economic Studies 13(2)
Ika, Siti Rochmah Ika, Abdullah , Norhayati. (2011). A Comparative Study of Financial Performance of Islamic Banks and Conventional Banks in Indonesia. International Journal of Business and Social Science 2 (15)
Komaryatin, N. (2006). Analisis Efisiensi Teknis Industri BPR di Eks Karesidenan Pati. Doctoral dissertation, Program Pascasarjana Universitas Diponegoro.
Leibenstein, H. (1966). Allocative efficiency vs.» X-efficiency». The American Economic Review, 392-415.
Lovell Knox, C.A. (1993) Production Frontiers and Productive Efficiency, in The measurement of productive efficiency : Techniques and applications,ed. Fried, H.O., Knox Lovell, C.A., Schmidt, S. S., Oxford University Press, 1993
Maudos, Joaquin, Pastor Jose M, Perez, Francisco, Quesada, Javier (2002). Cost and profit efficiency in European banks. Journal of International Financial Markets, Institutions and Money 12, 33-58
Nunamaker, T. R. (1985) Using Data Envelopment Analysis to Measure the Efficiency of Non-Profit Organisations: A Critical Evaluation. Managerial and Decision Economics 6: 1, 50–58.
Sarker, M.A.A. (1999). Islamic Banking in Bangladesh: Performance, Problems and Prospects. International Journal of Islamic Financial Services 1
Sathye, M. (2001). X-efficiency in Australian banking: An empirical investigation. Journal of Banking & Finance, 25(3), 613-630.
Soteriou, A., and S. Zenios (1998) Data Envelopment Analysis: An Introduction and Application to Bank Branch Performance
Assessment. In G. Marcoulides (ed.) Modern Methods for Business Research. London: Lawrence Erlbaum Associates. p. 136.
Yudistira, Donsyah. (2004). Efficiency in Islamic Banking : An Empirical Analysis of Eighteen Banks. Islamic Economic Studies 25(1)
Downloads
Submitted
Published
How to Cite
Issue
Section
License
Copyright (c) 2020 Aimatul Yumna
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Journal Author(s) Rights
For IRJBS to publish and disseminate research articles, we need publishing rights (transferred from the author(s) to the publisher). This is determined by a publishing agreement between the Author(s) and IRJBS. This agreement deals with the transfer or license of the copyright of publishing to IRJBS, while Authors still retain significant rights to use and share their own published articles. IRJBS supports the need for authors to share, disseminate and maximize the impact of their research and these rights, in any databases.
As a journal Author, you have rights to many uses of your article, including use by your employing institute or company. These Author rights can be exercised without the need to obtain specific permission. Authors publishing in IRJBS journals have comprehensive rights to use their works for teaching and scholarly purposes without needing to seek permission, including:
- use for classroom teaching by Author or Author's institution and presentation at a meeting or conference and distributing copies to attendees;
- use for internal training by the author's company;
- distribution to colleagues for their research use;
- use in a subsequent compilation of the author's works;
- inclusion in a thesis or dissertation;
- reuse of portions or extracts from the article in other works (with full acknowledgment of the final article);
- preparation of derivative works (other than commercial purposes) (with full acknowledgment of the final article);
- voluntary posting on open websites operated by the author or the author’s institution for scholarly purposes,
(But it should follow the open access license of Creative Common CC-by-SA License).
Authors/Readers/Third Parties can copy and redistribute the material in any medium or format, as well as remix, transform, and build upon the material for any purpose, even commercially. Still, they must give appropriate credit (the name of the creator and attribution parties (authors' detail information), a copyright notice, an open access license notice, a disclaimer notice, and a link to the material), provide a link to the license, and indicate if changes were made (Publisher indicates the modification of the material (if any) and retain an indication of previous modifications.
Authors/Readers/Third Parties can read, print and download, redistribute or republish the article (e.g. display in a repository), translate the article, download for text and data mining purposes, reuse portions or extracts from the article in other works, sell or re-use for commercial purposes, remix, transform, or build upon the material, they must distribute their contributions under the same license as the original Creative Commons Attribution-ShareAlike (CC BY-SA).
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
