Commenced in January 2007
Paper Count: 31584
Profit Efficiency and Competitiveness of Commercial Banks in Malaysia
Abstract:This paper attempts to identify the significance of Information and Communications Technology (ICT) and competitiveness to the profit efficiency of commercial banks in Malaysia. The profit efficiency of commercial banks in Malaysia, the dependent variable, was estimated using the Stochastic Frontier Approach (SFA) on a sample of unbalanced panel data, covering 23 commercial banks, between 1995 to 2007. Based on the empirical results, ICT was not found to exert a significant impact on profit efficiency, whereas competitiveness, non ICT stock expenditure and ownership were significant contributors. On the other hand, the size of banks was found to have significantly reduced profit efficiency, opening up for various interpretations of the interrelated role of ICT and competition.
Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1055192Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 2629
 Abdul Ghafar, Hairunnizam Wahid, Mohd Azlan Shah Zaidi & Zulkefly Abdul Karim. 2002. Struktur dan reformasi perbankan Malaysia: Persaingan dan kebolehtandingan pasaran, Laporan Penyelidikan 2002, Jabatan Analisis Ekonomi dan Dasar Awam, Fakulti Ekonomi, Universiti Kebangsaan Malaysia, Bangi. Jun 2002.
 Battese, G.E. & Coelli,T.J. 1992. Frontier production functions, technical efficiency and panel data: With application to paddy farmers in India-. Journal of Productivity Analysis, 3: 153 - 169.
 Bailey, M. & Gordon, R. 1988. The productivity slowdown, measurement issues and the explosion of computer power, Brookings Papers on Economic Activities, 19(2), 347-420.
 Berger A.N. & Mester L.J. 1997. Efficiency and productivity trends in the U.S. Commercial banking industry: A comparison of the 1980-s and 1990-s, CSLS Conference on Service Sector Productivity and the Productivity Paradox.
 Berger A.N. & Mester L.J. 1997a. Efficiency and productivity trends in the U.S. commercial banking industry: A comparison of the 1980-s and 1990-s. CSLS Conference on service sector productivity and the productivity paradox. Centre for the Study of Living Standards. Ottawa. 11 -12 April.
 Claessens, S. & Laeven, L. 2003. What drives bank competition? Some international evidence, World Bank Policy Research Working Paper 3113 (online) http://www.worldbank.org/finance.assets/images/wps3113.pdf (20 April 2004).
 Fadzlan, S. & Muhd. Zulkhilbri A. M. 2005. Post-merger banks- efficiency and risks in emerging market: Evidence from Malaysia. The Icfai Journal of Bank Management. 4 (4): 16-37.
 Lozano, A. 1997. Profit efficiency for Spanish savings banks, European Jounal of Operational Research, 381-394.
 Mariani Abdul Majid, Nor Ghani Md. Nor and Fathin Faezah Said. 2003. Are Malaysian public owned banks less efficient? Evidence using stochastic frontier approach, Prosiding Seminar Kebangsaan Dasar Awam dalam era globalisasi: Penilaian semula ke arah Pemantapan Strategi. UKM.
 Mohd Zaini Abd. Karim. 2001. Comparative bank efficiency across select ASEAN countries, ASEAN Economic Bulletin 18(3),pp.289- 304.
 Mohd Zaini Abd. Karim. 2003. Information technology and cost efficiency in Malaysian banking industry. Malaysian Management Journal 7 (2):47 - 58.
 Nikiel, E.M. & Opiela, T.P. 2002 Customer type and bank efficiency in Poland : implications for emerging market banking, Contemporary Economic Policy, 20(3), pp. 255 - 271.
 Parson, D.J., Calvin, C.G. & Denny, M. 1993. Productivity and computers in Canadian banking, Journal of Productivity Analysis, 4 (Jun).
 Rosita Suhaimi. 2006. Analisis Prestasi Bank Perdagangan di Malaysia, UiTM.
 Samudram, M. 2004. The Impact of ICT on various sectors of Malaysian economy. Mimos Sdn. Bhd., 10 April 2004.
 Stiroh, K.J. 1998. Computers, productivity, and input substitution, Economic Inquiry 36(April): 175 - 191.
 Stiroh, K.J. 2001. Information Technology and the U.S. Productivity Revival: What do the Industry Data Say?. Federal Reserve Bank of New York, New York.
 Yildirim, H.S. & Philippatos, G.C., 2002. "Efficiency of banks: Recent evidence from the transition economies of Europe (1993 - 2000)", (atas talian) http://www.commerce.usask.ca/faculty/yildirim/efficiency. (30 April 2003).