Assessing production efficiency of Islamic banks and conventional bank Islamic windows in Malaysia

International Journal of Business and Management Science

Volumn 1, Issue 1, 2008, Pages 31-48

  Kamaruddin, Badrul Hisham ^a   Safa, Mohammad Samaun ^a   Mohd, Rohani ^a  

^a UNIVERSITI TEKNOLOGI MARA   (Malaysia)

Author keywords

Allocative efficiency; Data Envelopment Analysis; Foreign banks; Technical efficiency

Indexed keywords

EID: 77954244854     PISSN: 18376614     EISSN: 1985692X     Source Type: Journal    
DOI: None     Document Type: Article

References (50)

1. Affandi, N.M. (2002). Islam and business. Subang Jaya: Pelanduk Publications (M) Sdn. Bhd.
2. Akhavein, J., Berger, A. and Humphrey, D. (1997). The effects of megamergers on efficiency and prices: evidence from a bank profit function. Review of Industrial Organization, 12(1): 95-139. (Pubitemid 127507268)
3. Akhigbe, A. and McNulty, J. (2005). Profit efficiency sources and differences among small and large US commercial banks. Journal of Economics and Finance, 29(3): 289-299.
4. Ariff, M., and Can, L. (2008). Cost and profit efficiency of Chinese banks: a nonparametric analysis. China Economic Review, 19(2): 207-273.
5. Avkiran, N.K. (1997). Performance of foreign banks in Australia. The Australian Banker, The Australian Institute of Banking and Finance, pp. 222-224.
6. Avkiran, N. K. (1999a). An application reference for Data Envelopment Analysis in branch banking: helping the novice researcher. International Journal of Bank Marketing, 17(5): 206-220.
7. Avkiran, N.K. (1999b). The evidence of efficiency gains: the role of mergers and the benefits to the public. Journal of Banking and Finance, 23(1): 991-1013.
8. Bank Negara Malaysia. Annual Report (1998-2004). Kuala Lumpur.
9. Batchelor, V.B. and Wadud, I.K.M.M. (2003). The efficiencies in Malaysian Islamic banking operations: an empirical appraisal. Unpublished Paper. The Islamic Banking Conference, September 9-10, Italy.
10. Berg, S.A. and Kim, M. (1991). Oligopolistic interdependence and banking efficiency: an empirical evaluation. Norges Bank Research Paper, No. 1991/5.
11. Bergendahl, G. (1995). DEA and benchmarks for Nordic banks. The Gothenburg University, Gothenburg, Sweden, December.
12. Berger, A.N., Hunter, W.C. and Timme, S.G. (1993a). The efficiency of financial institutions: a review and preview of research past, present and future. Journal of Banking and Finance, 17(2/3): 221-249.
13. Berger, A.N., Hancock, D. and Humphrey, D.B. (1993b). Bank efficiency derived from the profit function. Journal of Banking and Finance, 17 (2/3): 317-347.
14. Berger, A.N. and Humphrey, D.B. (1997). Efficiency of financial institutions: international survey and directions for future research. European Journal of Operational Research, 98: 175-212. (Pubitemid 127380063)
15. Berger, A.N. and Mester, L.J. (1997). Inside the black box: what explains the differences in the efficiencies of financial institutions. Journal of Banking and Finance, 21(7): 895-947. (Pubitemid 127164186)
16. Brown, K. and Skully, M. (2004). Comparative Islamic bank performance with environmental considerations. In Shanmugam, B., Perumal V. & Rodzwa, A.H.(Eds.), Islamic Banking: An International Perspective (pp. 84-206). Serdang: Universiti Putra Malaysia Press.
17. Chang, C.E., I. Hassan and W.C. Hunter (1998). Efficiency of multinational banks: an empirical investigation. Applied Financial Economics, 8(6): 1-8.
18. Chu, S.F. and Lim, G.H. (1998). Share performance and profit efficiency of banks in an oligopolistic market: evidence from Singapore. Journal of Multinational Financial Management, 8(2): 155-168. (Pubitemid 128339872)
19. Cobb, C.W. and Douglas, P.H. (1928). A theory of production. The American Economic Review, 18(1): 139-165.
20. th Annual Conference, January, Cairo.
21. DeYoung, R. and Nolle, D. (1996). Foreign-owned banks in the US: earning market share or buying it? Journal of Money, Credit and Banking, 28: 622-636.
22. Fare, R., Grosskopf, S., and Weber, W.L. (2004). The effect of risk-based capital requirements on profit efficiency in banking. Applied Economics, 36 (5): 1731-1743. (Pubitemid 39081007)
23. Farrell, M.J. (1957). The measurement of productive efficiency. Journal of the Royal Statistical Society, 120(3): 253-281.
24. Favero, C.A. and Papi, L. (1995). Technical efficiency and scale efficiency in the Italian banking sector: a non-parametric approach. Applied Economics, 27(4): 385-395.
25. Fitzpatrick, T. and Mcquinn, K. (2005). Measuring bank profit efficiency. Research Technical Paper, Economic Analysis and Research Department, Central Bank and Financial Services Authority of Ireland.
26. Giokas, D. (1991). Bank branch operating efficiency: a comparative application of DEA and the loglinear model. Omega International Journal of Management Sciences, 19 (6): 549-557.
27. Haag, S.E. and Jaska, P.V. (1995). Interpreting inefficiency rating: an application of bank branch operating efficiencies. Managerial and Decision Economics, 16(1): 7-14.
28. Harrison, B., Smith, C. and Davies, B. (1992). Introduction to Economics. London: Macmillan.
29. Hasan, I. and Marton, K. (2001). Development and efficiency of the banking sector in a transitional economy: Hungarian experience. Working Paper (New Jersey Institute of Technology, Newark, N.J.)
30. Heffernan, S. (2005). Modern banking. Chichester (England): John Wiley and Sons.
31. Isik, I. and Hassan, M.K. (2002). Cost and profit efficiency of the Turkish banking industry: an empirical investigation. The Financial Review, 37(2): 257-280.
32. Kasman, A. and Yildirim, C. (2006). Cost and profit efficiencies in transition banking: the case of new EU members. Applied Economics, 38 (9): 1079-1090. (Pubitemid 43840729)
33. Karim, M.Z.A. (2001). Comparative bank efficiency across select ASEAN countries. ASEAN Economic Bulletin, 18 (3): 289-304.
34. Katib, M.N. and.Matthews, K. (1999). A non-parametric approach to efficiency measurement in the Malaysian banking system. The Singapore Economic Review, 44(2): 89-114.
35. Leibenstein, H. (1966). Allocative efficiency versus X-efficiency. American Economic Review, 56(3): 392-415.
36. Liu, B. and Tripe, D.W.L. (2002). New Zealand bank mergers and efficiency gains. Journal of Asia-Pacific, 4(4): 61-81.
37. Lozano-Vivas, A. (1997). Profit efficiency of Spanish savings banks. European Journal of Operational Research, 98 (2): 381-394.
38. Mahajan, A., N. Rangan and A. Zardkoohi (1996). Cost structures in multinational and domestic banking. Journal of Banking and Finance, 20(2): 238-306.
39. Majid, M.A., Md. Nor, N.G. and Said, F.F. (2005). Efficiency of Islamic banks in Malaysia. In Iqbal, M. and Ahmad, A. (Eds.), Islamic Finance and Economic Development (pp. 94-104). New York: Palgrave Macmillan.
40. Maudos, J. and Pastor, J.M. (2003). Cost and profit efficiency in the Spanish banking sector (1985-1996): a non-parametric approach. Applied Financial Economics, 13(1): 1-12. (Pubitemid 44121597)
41. Oral, M. and R. Yolalan. (1990). An empirical study on measuring operating efficiency and profitability of bank branches. European Journal of Operational Research, 46(3): 282-294. (Pubitemid 20720809)
42. Rangan, N., Grabowski, R., Aly, H.Y. and Pasurka, C. (1988). The technical efficiency of US banks. Economics Letters, 28(2): 169-175.
43. Rogers, K.E. (1998). Non-traditional activities and the efficiency of US commercial banks. Journal of Banking and Finance, 22(4): 467-482. (Pubitemid 128340518)
44. Sathye, M. (2001). X-efficiency in Australian banking: an empirical investigation. Journal of Banking and Finance, 25(3): 613-630. (Pubitemid 33619495)
45. Vassiloglou, M. and Giolias, D. (1990). A study of the relative efficiency of bank branches: an application of Data Envelopment Analysis. Journal of Operational Research Society, 41(7): 591-597.
46. Wadud, I.K.M.M. and Yasmeen, W. (2004). Competitiveness and returns to scale in the Bangladesh banking industry: a closer look into profitability of Islamic banking. In Shanmugam, B., Perumal, V. and Ridzwa, A.H. (Eds), Islamic Banking: An International Perspective. Serdang: Universiti Putra Malaysia Press.
47. Wheelock, D.C. and Wilson, P.W. (1995). Explaining bank failures: deposit insurance, regulation and efficiency. Review of Economics and Statistics, 77(4): 689-700. (Pubitemid 26478451)
48. Wong, S.C., Jomo, K.S. and Chin, K.F. (2005). Malaysian "bail-outs"? Capital controls, restructuring and recovery. Singapore: Singapore University Press.
49. Yeh, Q.J. (1996). The application of data envelopment analysis in conjunction with financial ratios for bank performance evaluation. Journal of the Operational Research Society, 47(8): 980-988.
50. Zaim, O. (1995). The effect of financial liberalization on the efficiency of Turkish commercial banks. Applied Financial Economics, 5(4): 7-64.