Financial Crisis, IMF, and Bank Efficiency: Empirical Evidence from The Asean-4 Banking Sectors

Fadzlan Sufian and Muzafar Shah Habibullah

Bulletin of Monetary Economics and Banking, 2009, vol. 12, issue 2, 123-150

Abstract: Despite its severity and deep influence on both the real and financial sectors, empirical evidence on the evolution of the performance of the ASEAN-4 banking sectors since the 1997-1998 Asian financial crisis is relatively scarce. By employing the Data Envelopment Analysis (DEA) approach the present study examines for the first time the impact of the Asian financial crisis on the efficiency of the ASEAN-4 countries banking sectors. This study focuses on two major approaches vis. intermediation and revenue approaches. The empirical findings suggest that the estimates of technical efficiency are consistently higher under the revenue approach. We find that banks are relatively inefficient in a more concentrated banking market. However, when we control for countries that participate in IMF program, the concentration ratio exhibits a positive relationship with bank efficiency levels, implying that the more concentrated banking system which participates in IMF program is relatively more efficient in their intermediation function during the post crisis period.

Keywords: Bank; Efficiency; DEA; ASEAN (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2009
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Journal Article: Financial Crisis, IMF, and Bank Efficiency: Empirical Evidence From The Asean-4 Banking Sectors (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:12:y:2009:i:2a:p:123-150

DOI: 10.21098/bemp.v12i2.353

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