Rural Bank Technical Efficiency in West Java Indonesia: Evaluation by Ownership and District

Mokhamad Anwar, Layyinaturrobaniyah Layyinaturrobaniyah, Ratna Komara, Sulaeman Rahman Nidar

Abstract


This study examines the efficiency of rural banks in West Java Indonesia in terms of technical efficiency. The analysis covers the 212 banks spread over some districts in west java province during the period 2012-2016. Those banks are under the supervision of the Financial Services Authority Regional Office of Bandung. The study employs Data Envelopment Analysis to obtain the technical efficiency of the banks over the study period. The study results suggest that there are some rural banks from certain districts enjoying most efficient; average efficiency of those banks over the study period is inclined to increase with the peak performance occurred in 2015. The other findings suggested that capital adequacy and bank size are of essential factors determining rural bank efficiency in West Java.


Keywords


DEA;data envelopment analysis; rural bank performance

Full Text:

PDF

References


Anwar, M. (2015). Bank Efficiency and Lending Propensity: Evidence from Commercial Banks in Indonesia. Ph.D. Thesis, University of Leicester, UK.

Berger, A.N., Klapper, L.F., & Udell, G.F. (2001). The Ability of Banks to Lend to Informationally Opaque Small Businesses. Journal of Banking & Finance, 25: 2127-2167.

Berger, A. N., Hasan, I., & Zhou, M. (2010). The Effects of Focus versus Diversification on Bank Performance: Evidence from Chinese Banks. Journal of Banking & Finance, 34: 1417-1435.

Berger, A.N., & Black, L.K. (2011). ‘Bank Size, Lending Technologies, and Small Business Finance’. Journal of Banking & Finance, 35: 724–735.

Bonin, J.P., Hasan, I., & Wachtel, P. (2005). Bank Performance, Efficiency and Ownership in Transition Countries. Journal of Banking & Finance, 29: 31-53.

Casu, B., & Molyneux, P. (2003). A comparative study of efficiency in European Banking. Applied Economics, 35: 1865-1876.

Chan, S.G., & Karim, M.Z.A. (2010). Bank Efficiency and Macroeconomic Factors: the Case of Developing Countries. Global Economic Review, 39:3, 269-289.

Chang, C.E., Hasan, I., & Hunter, W. (1998). Efficiency of multinational banks: An empirical investigation. Applied Financial Economics, 8: 689-696.

Kao, C., & Liu, S.T. (2004). Predicting Bank Performance with Financial Forecast: A Case of Taiwan Commercial Banks. Journal of Banking and Finance, 28: 2353-2368.

Chunhachinda, P., & Li, L. (2010). Efficiency of Thai Commercial Banks: Pre-vs.Post-1997 Financial Crisis. Review of Pacific Basin Financial Markets and Policies (Vol. 13, No. 3): 417-447.

Coelli, T.J., Rao, D.S.P., O’Donnell, C.J., & Battese, G.E. (2005). An Introduction to Efficiency and Productivity Analysis: Second Edition. Springer Science and Business Media, LLC.

Fethi, M.D., Shaban, M., & Jones, T.W. (2011). Liberalisation, Privatisation, and the Productivity of Egyptian banks: A Non-parametric Approach. The Service Industries Journal, 31:7, 1143-1163.

Gardener, E., Molyneux, P., & Nguyen, L. H. (2011). Determinants of efficiency in Southeast Asian banking. The Service Industries Journal, 31(16), 2693-2719. DOI: 10.1080/02642069.2010.512659

Hadad, M.D., Hall, M.J.B., Kenjegalieva, K.A., Santoso, W., Satria, R., & Simper, R. (2011). Banking Efficiency and Stock Market Performance: An Analysis of Listed Indonesian Banks. Rev Quant Finan Acc, 37:1-20.

Hamiltona, R., Qasrawib, W. & Al-jarrah, I.M. (2010). Cost and Profit Efficiency in the Jordan Banking Sector 1993-2006: A Parametric Approach. International Research Journal of Finance and Economics, ISSN 1450-2887 Issue 56.

Kao, C., & Liu, S-T. (2004). Predicting bank performance with financial forecasts: A case of Taiwan commercial banks. Journal of Banking & Finance, 28: 2353-2368.

Mamatzakis, E, Staikouras, C., & Filippaki, A.K. (2008). Bank Efficiency in the New European Union Member States: Is There Convergence?. Int’l Review of Financial Analysis, 1156-1172.

Shaban, M (2008). Financial Liberalisation, Privatisation, and Productivity in Banking: The Experience in Two Emerging Economies. Ph.D. Thesis, School of Management, University of Leicester, UK.

Shin, D.J.,& Kim, B.H. S. (2011). Efficiency of the Banking Industry Structure in Korea. Asian Economic Journal (Vol. 25 No. 4), 355-373.

Sufian, F. (2010). The Impact of the Asian financial crisis on bank efficiency: the 1997 experience of Malaysia and Thailand. Journal of International Development, 22: 866-889.

Sufian, F. (2011). Benchmarking the efficiency of the Korean banking sector: a DEA approach. Benchmarking: An International journal (Vo. 18 No. 1), pp. 107-127.

Suzuki, Y., & Sastrosuwito, S. (2011). Efficiency and Productivity Change of the Indonesian Commercial Banks. International Conference on economics, Trade and development IPEDR (Vol.7), IACSIT, Singapore.




DOI: http://dx.doi.org/10.24198/jbm.v19i2.188

Refbacks

  • There are currently no refbacks.


Copyright (c) 2018 Jurnal Bisnis dan Manajemen

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.