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Efficiency of commercial banks in Malaysia

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dc.contributor.authorMohd. Azmi Omar
dc.contributor.authorAbdul Rahim Abdul Rahman
dc.contributor.authorRosylin Mohd. Yusuf
dc.contributor.authorM. Shabri Abd. Majid
dc.contributor.authorMohamed Eskandar Shah Mohd Rasid
dc.date.accessioned2016-08-01T10:33:50Z
dc.date.available2016-08-01T10:33:50Z
dc.date.disclosure2016-07-22
dc.date.issued2006
dc.description.abstractThis study investigates the change in the productivity of banking industry during the period of 2000 to 2004. The data consists of a panel of 11 commercial banks in Malaysia namely Malayan Banking, Bumiputra-Commerce, Public Bank, RHB Bank, Hong Leong Berhad, EON Bank, Affin Bank, Southern Bank Berhad, Bank Islam Malaysia Berhad (BIMB), Ambank and Bank Muamalat. Productivity is measured by the Malmquist index, using a Data Envelopment Analysis (DEA) technique. The Malmquist productivity measures are decomposed into two components: efficiency change and technical change index. Efficiency change is again decomposed into pure efficiency and scale efficiency. Overall, the results show that Total Factor Productivity (TFP) has slightly increased for the whole industry in which efficiency change is found to be the most important source of productivity growth to Malaysia’s banking industry as compared to technical component that contributes a negative change to the overall TFP growth. In this case, the scale efficiency is found to be a more important source of efficiency change than pure efficiency component. This implies that the size does matter in improving bank efficiency. Negative growth of technical efficiency indicates a great potential for the industry to increase productivity through higher utilization of technology as well as technological knowledge dispersion. Continuous training programs to familiarize and improve technical expertise appear to offer better prospects for Malaysia’s banking industry to achieve greater TFP growth.
dc.identifier.citationOmar, M. A., Abdul Rahman, A. R., Mohd. Yusuf, R., Abd. Majid, M. S., & Mohd Rasid, M. E. S. (2006). Efficiency of commercial banks in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 2(2), 19-42.
dc.identifier.urihttps://ikr.inceif.edu.my/handle/INCEIF/1758
dc.languageEnglish
dc.language.isoeng
dc.publisherAsian Academy of Management Journal of Accounting and Finance
dc.rights2006. Asian Academy of Management Journal of Accounting and Finance
dc.sourceCRP
dc.subjectData Envelopment Analysis (DEA)
dc.subjectMalmquist index
dc.subjectBank efficiency
dc.subjectIslamic commercial banks in Malaysia
dc.titleEfficiency of commercial banks in Malaysia
dc.typeJournal Article
dlc.maintopicIslamic banking
dspace.entity.typePublication
ikr.doctypeScholarly Works
ikr.topic.maintopicIslamic banking
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