Assessing the Revenue Efficiency of Domestic and Foreign Islamic Banks: Empirical Evidence from Malaysia (Penaksiran Kecekapan Hasil Bank Islam Domestik dan Asing: Bukti Empirikal dari Malaysia)

Fadzlan Sufian, Fakarudin Kamarudin, Nor Halida Haziaton Mohd Noor

Abstract


ABSTRACT

The present paper provides new empirical evidence regarding revenue efficiency in the Malaysian Islamic banking sector during the period from 2006 to 2010. The sample is comprised of 17 domestic and foreign Islamic banks. The Data Envelopment Analysis (DEA) method is employed to compute the revenue efficiency levels. The results indicate that the domestic Islamic banks exhibit lower revenue efficiency levels compared to foreign counterparts. In addition, the empirical findings suggest that the foreign Islamic banks exhibit higher efficiency levels for all three efficiency measures and are consistent with the global advantage theory. In essence, revenue efficiency seems to play the main role in lower or higher profit efficiency levels. The findings of the present study are expected to be relevant to regulators and policymakers, the Islamic banking industry and investors; and contribute significantly to existing knowledge on the operating performance of the Malaysian Islamic banking sector.

Keywords: Islamic banks; revenue efficiency; data envelopment analysis; Malaysia

ABSTRAK

Kajian ini menyediakan bukti empirikal baru mengenai kecekapan hasil dalam sektor perbankan Islam Malaysia sepanjang tempoh 2006-2010. Sampel kajian terdiri daripada 17 bank Islam domestic dan asing. Kami menggunakan kaedah Analisis Menyampul Data (DEA) untuk mengira tahap kecekapan hasil. Keputusan menunjukkan bahawa bank Islam domestik telah mempamerkan tahap kecekapan hasil yang lebih rendah berbanding dengan bank Islam asing. Di samping itu, hasil kajian ini menyarankan bahawa bank Islam asing telah menunjukkan tahap kecekapan yang lebih tinggi untuk ketiga-tiga ukuran kecekapan dan konsisten dengan teori kelebihan global. Pada dasarnya, kecekapan hasil memainkan peranan utama yang membawa kepada tahap kecekapan keuntungan yang lebih rendah atau tinggi. Dapatan kajian ini dijangka dapat menyumbang kepada pengawal selia atau dasar, perbankan Islam itu sendiri, pelabur dan pengetahuan sedia ada mengenai prestasi operasi sektor perbankan Islam Malaysia.

Kata kunci: Bank Islam; kecekapan hasil; analisis balutan data; Malaysia


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