Evolution in the efficiency of the Indonesian banking sector: a DEA approach

Fadzlan Sufian

International Journal of Applied Management Science, 2010, vol. 2, issue 4, 388-414

Abstract: The paper provides empirical evidence on the evolution of the Indonesian banking sector's efficiency during the post Asian financial crisis period of 1999-2008. The efficiency estimates of individual banks are evaluated by using the data envelopment analysis (DEA) approach. The estimates of technical efficiency (TE) were observed to be consistently higher under intermediation approach vis-a-vis revenue approach. The empirical findings suggest that under the intermediation approach, the Indonesian banking sector's inefficiency stems largely from pure technical rather than scale, while scale inefficiency seem to outweigh pure technical inefficiency under the revenue approach.

Keywords: bank efficiency; data envelopment analysis; DEA; Indonesia; banking industry; technical efficiency; intermediation; scale efficiency; revenue. (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:injams:v:2:y:2010:i:4:p:388-414

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