MULTIVARIATE ANALYSIS MODEL IN MEASURING THE LEVEL OF THE EFFICIENCY ISLAMIC BANKING INDUSTRY

Willyanto Kartiko Kusumo, Muljono Muljono

Abstract


Efficiency is one of the performance parameters underlying an organization. Efficiency in the world of banking is one of the performance parameters that is quite popular and widely used because it is the answer to the difficulties in calculating banking performance measurements. The measurement of banking efficiency can be done with Multivariate Analysis. Multiveriate is a methodology for determining relative efficiency and managerial performance based on empirical data. In this method, profit is modeled to be deviated from its profit efficient frontier which is influenced by the input and output functions. The sample of this study was 40 Islamic Commercial Banks and Islamic Business Units for 4 years starting from 2014-2018 which were analyzed using the STATA 8 technique with panel data. The results of this research show that Islamic banks are technically efficient based on intermediation (100%) and the efficient scale based on intermediation and production. Efficiency can be increasing liquid assets, while based on production approach.


Keywords


Efficiency; Financial performance; Profitability, Islamic Bank Industry.

Full Text:

PDF

References


Afiatun, Pipit and Sudarso Kaderi Wiryono. 2016. "Efficiency and Productivity of IndonesianIslamic Banking". Journal of Technology Management. Vol 9 No.3. Pp. 264-274.

Amirillah, Muhammad Afif, Efficiency of Sharia Banking in Indonesia in 2011-2015. Master's thesis published. Post-graduate program in UNDIP FE. 2015

Astiyah, Siti and Jardine A. Husman (2016), "Intermediation Function in Banking Efficiency in Indonesia: Deviation of Provit Functions", Bulletin of Monetary Economics and Banking, Volume 8, No. 4, pp. 529-543, Bank Indonesia, Jakarta.

Ascarya, Diana Yumanita. 2012. "Comparing The Efficiency of Islamic Banks in Malaysia and Indonesia". Bulletin of Monetary and Banking Economics, IAEI Team. Pp. 95-119.

Coelli T.J, A Guide to DEAP Version 2.1: A Data Envelopment Analysis (Computer) Program, No. 8/96. Center for Efficiency and Productivity Analysis of the Econometric Department of the University of New England Armidale, NSW, 2351. 2012.

Hadad, Santoso, and Mardanugraha (2013), "Efficiency Analysis of Islamic Banking Techniques in Indonesia with Structural Conduct Performance (SCP) Methods", Research Paper, no. 7/5, Bank Indonesia Financial System Stability Bureau.

Hadinata, Ivan and A. H Manurung. 2012. "Application of Data Envelopment Analysis to Measure Performance Efficiency of Stock Funds".

Hassan, M.Kabir, Cost, Profit and X-Efficiency of Islamic Banks in Pakistan, Iran and Sudan. International Seminar on Islamic Banking Risk Management, regulation and Supervision Jakarta, Indonesia. October 2013.

Huri, M. D. and Indah Susilowati. 2014. "Measurement of Relative Efficiency of Banking Issuers with Data Envelopment Analysis (DEA) Method (Case Study: Banks Listed on the Jakarta Stock Exchange in 2002)". Journal of Development Dynamics, Vol. 1 No 2 p. 95-110.

Iqbal, Ahmad, Comparison of the efficiency of Islamic commercial banks (BUS) and conventional commercial banks (BUK) in Indonesia using the stochastic frontier approach. (SCP). 2011

Johnes, Jill. Et al. 2014. "Efficiency in Islamic and conventional banks: A comparison based on financial and data envelopment analysis". Journal Department of Economics Lancaster University. Thing 1-45.

Lie, C. L. and Lih A. T. 2015. "Application of DEA and SCP on the Measurement of Operating Efficiencies for 27 International Container Ports". Paper in the Proceedings of the Eastern Asia Society for Transporation Studies, Vol. 5, p. 592-607. Taiwan

Muharam and Pusvitasari. 2012. "Efficiency Comparative Analysis of Islamic Banks with Data Envelopment Analysis Method (2012 period)". Journal of Islamic Economics and Business, Vol.2 No.3.

Mulyadi. 2000. Cost Accounting, Issue 5. Yogyakarta: Aditya Media.

Daughter, Vicky Rahma and Niki Lukviarman. 2014. "Measurement of Commercial Bank Performance with Efficiency Approach: Study of Go-Public Banking in Indonesia. JAAI. Vol 12 No.1. Pp. 37-52

Pratikto, Heri and Iis Sugianto, Performance of Islamic Bank Efficiency Before and After the Global Crisis Based on Data Envelopment Analysis, Malang. 2011

Qureshi, Muhammad Azeem. 2012. "Efficiency of Islamic and Conventional Banks: A Non-parametric Approach". International Journal of Business and Management. Vol 7 No.7. Thing 40-50.

Rosyadi, Imron and Fauzan, Comparative Efficiency of Islamic Banking and Conventional Banking in Indonesia, Journal of Management and Business. Surakarta. 2011

Sufian, Fadzlan. 2012. "The Efficiency of Islamic Banking Industry in Malaysia: Foreign vs Domestic Bank". Humanomics, Vol. 23 No. 3 things 174-192: Emerald Publishing Group Limited.

Sutawijaya, A. and Lestari, E. P. 2014. "Efficiency of Indonesian Banking Techniques After the Economic Crisis: An Empirical Study of the Application of the SCP Model". Journal of Development Economics, Vol. 10 No.1.

Yudhistira, Donsyah. 2013. "Efficiency In Islamic Banking: An Empirical Analysis of 18 Banks". United Kingdom: Department of Economic, Loughborough University, Leicestershire.




DOI: http://dx.doi.org/10.26623/ebsj.v3i2.1577

Refbacks

  • There are currently no refbacks.


                                     Home