Determinant of regional development bank efficiency for their sustainability issues
Sulaeman Rahman Nidar (sulaeman.rahman@fe.unpad.ac.id),
Mokhamad Anwar (mokhamad.anwar@fe.unpad.ac.id),
Ratna Komara (ratna.komara@unpad.ac.id) and
Layyinaturrobaniyah Layyinaturrobaniyah
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Sulaeman Rahman Nidar: Padjadjaran University, Indonesia
Mokhamad Anwar: Padjadjaran University, Indonesia
Ratna Komara: Padjadjaran University, Indonesia
Entrepreneurship and Sustainability Issues, 2020, vol. 8, issue 1, 1133-1145
Abstract:
Banking efficiency is the main factor that needs to be considered in creating banking competitiveness. This study aims to determine the efficiency of the Regional Development Banks (RDBs) in Indonesia. There are around 26 RDBs throughout Indonesia, however, due to the completeness of the data as the main criteria of this purposive sampling research, this study includes 19 RDBs in observations. This study adopts a quantitative analysis with multiple regressions. There are only 2 variables that significantly affect efficiency, namely the Operational Cost to Operational Income (OCOI) variable and the Loan to Deposit Ratio (LDR) variable, and the other variables do not have any significant effects on the efficiency. In general, the dependent variable can be explained simultaneously by the independent variables around 95%, and the remaining 5% is explained by other variables outside the model. Since only 7 RDBs are efficient, then it is necessary for the management of those banks to do hard effort to maintain efficiency and keep on as sustainable banking in this competitiveness era.
Keywords: efficiency; regional development banks; operational cost to operational income; loan to deposit ratio (search for similar items in EconPapers)
JEL-codes: G20 G21 H21 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ssi:jouesi:v:8:y:2020:i:1:p:1133-1145
DOI: 10.9770/jesi.2020.8.1(76)
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