Assessing Production Efficiency of conventional and Islamic Bank in Malaysia

Kamaruddin, B. H., Safa, M.S. and Mohd, R. (2008) Assessing Production Efficiency of conventional and Islamic Bank in Malaysia. International Journal of Management and Business Research, 1 1: 31-48.

Author Kamaruddin, B. H.
Safa, M.S.
Mohd, R.
Title Assessing Production Efficiency of conventional and Islamic Bank in Malaysia
Journal name International Journal of Management and Business Research
ISSN 1985-3599
Publication date 2008
Year available 2008
Sub-type Article (original research)
Volume 1
Issue 1
Start page 31
End page 48
Total pages 18
Place of publication Nashville, Tennessee, USA
Publisher Intellectbase International Consortium
Language eng
Subject 150299 Banking, Finance and Investment not elsewhere classified
150313 Quality Management
1503 Business and Management
Abstract This study presents new perspectives on performance evaluation of Islamic banking operations in Malaysia, by investigating for the first time, both cost and profit efficiency of full-fledged Islamic banks and Islamic window operations of domestic and foreign banks. The application of Data Envelopment Analysis (DEA) technique has provided several efficiency measures such as allocative, pure technical and scale efficiency that explain cost and profit efficiency differentials among banks. The findings of the study show that Islamic banking operators are relatively more efficient at controlling costs than at generating profits. The main contributor for cost efficiency of domestic and foreign banks comes from resource management and economies of scale respectively. These findings have implications on the reform process carried out in the aftermath of Asian financial crisis, particularly the Financial Sector Master Plan (FSMP).
Keyword Allocative efficiency
Data envelopment analysis
Foreign banks
Production Efficiency
Technical efficiency
Q-Index Code C1
Q-Index Status Provisional Code

Document type: Journal Article
Sub-type: Article (original research)
Collections: Excellence in Research Australia (ERA) - Collection
School of Agriculture and Food Sciences
 
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Created: Fri, 18 Dec 2009, 13:01:48 EST by Jacky Cribb on behalf of Faculty Of Nat Resources, Agric & Veterinary Sc