The efficiency of Islamic Banks in the Southeast Asia (SEA) Region
Abstract The Islamic banking sector has become a crucial part of the global banking industry. Despite the Islamic banking industry’s encouraging growth in the Southeast Asia (SEA) region, prior studies mostly focused on Islamic banks’ efficiency in the individual country. To fill the literature gap,...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
SpringerOpen
2021-05-01
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| Series: | Future Business Journal |
| Subjects: | |
| Online Access: | https://doi.org/10.1186/s43093-021-00062-z |
| _version_ | 1818734421117763584 |
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| author | Mohammad Abdul Matin Chowdhury Razali Haron |
| author_facet | Mohammad Abdul Matin Chowdhury Razali Haron |
| author_sort | Mohammad Abdul Matin Chowdhury |
| collection | DOAJ |
| description | Abstract The Islamic banking sector has become a crucial part of the global banking industry. Despite the Islamic banking industry’s encouraging growth in the Southeast Asia (SEA) region, prior studies mostly focused on Islamic banks’ efficiency in the individual country. To fill the literature gap, this study aims to measure the efficiency and productivity growth of Islamic banks in the SEA region. This study adopted the DEA technique and the Malmquist productivity index to evaluate 31 Islamic banks’ performance in SEA from 2014 to 2019. The results evidenced an improvement in efficiency and progress in productivity for the banks in the region. The findings documented better efficiency and gradual progress in productivity for Islamic banks in Indonesia, consistent efficiency for Malaysia, a significant improvement for Brunei; hence, both Thailand and the Philippines Islamic bank depicted a drop-in efficiency for 2019. The findings trigger bank managers to acknowledge the inefficiencies and their sources. Investors and policymakers may find the findings useful in observing the banks’ performance; thus, taking effective mechanism and policies to promote competent and sustainable SEA Islamic banks in the long run. |
| first_indexed | 2024-12-18T00:05:05Z |
| format | Article |
| id | doaj.art-249f2383d9b642649b4cfeb35ae5a791 |
| institution | Directory Open Access Journal |
| issn | 2314-7210 |
| language | English |
| last_indexed | 2024-12-18T00:05:05Z |
| publishDate | 2021-05-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Future Business Journal |
| spelling | doaj.art-249f2383d9b642649b4cfeb35ae5a7912022-12-21T21:27:50ZengSpringerOpenFuture Business Journal2314-72102021-05-017111610.1186/s43093-021-00062-zThe efficiency of Islamic Banks in the Southeast Asia (SEA) RegionMohammad Abdul Matin Chowdhury0Razali Haron1Department of Finance, Kulliyyah of Economics and Management Sciences, International Islamic University MalaysiaIIUM Institute of Islamic Banking and Finance, International Islamic University MalaysiaAbstract The Islamic banking sector has become a crucial part of the global banking industry. Despite the Islamic banking industry’s encouraging growth in the Southeast Asia (SEA) region, prior studies mostly focused on Islamic banks’ efficiency in the individual country. To fill the literature gap, this study aims to measure the efficiency and productivity growth of Islamic banks in the SEA region. This study adopted the DEA technique and the Malmquist productivity index to evaluate 31 Islamic banks’ performance in SEA from 2014 to 2019. The results evidenced an improvement in efficiency and progress in productivity for the banks in the region. The findings documented better efficiency and gradual progress in productivity for Islamic banks in Indonesia, consistent efficiency for Malaysia, a significant improvement for Brunei; hence, both Thailand and the Philippines Islamic bank depicted a drop-in efficiency for 2019. The findings trigger bank managers to acknowledge the inefficiencies and their sources. Investors and policymakers may find the findings useful in observing the banks’ performance; thus, taking effective mechanism and policies to promote competent and sustainable SEA Islamic banks in the long run.https://doi.org/10.1186/s43093-021-00062-zEfficiencyIslamic banking efficiencyTotal factor productivity (TFP)Islamic Banks’ performanceDEAThe Malmquist productivity index |
| spellingShingle | Mohammad Abdul Matin Chowdhury Razali Haron The efficiency of Islamic Banks in the Southeast Asia (SEA) Region Future Business Journal Efficiency Islamic banking efficiency Total factor productivity (TFP) Islamic Banks’ performance DEA The Malmquist productivity index |
| title | The efficiency of Islamic Banks in the Southeast Asia (SEA) Region |
| title_full | The efficiency of Islamic Banks in the Southeast Asia (SEA) Region |
| title_fullStr | The efficiency of Islamic Banks in the Southeast Asia (SEA) Region |
| title_full_unstemmed | The efficiency of Islamic Banks in the Southeast Asia (SEA) Region |
| title_short | The efficiency of Islamic Banks in the Southeast Asia (SEA) Region |
| title_sort | efficiency of islamic banks in the southeast asia sea region |
| topic | Efficiency Islamic banking efficiency Total factor productivity (TFP) Islamic Banks’ performance DEA The Malmquist productivity index |
| url | https://doi.org/10.1186/s43093-021-00062-z |
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