A new approach to dealing with negative numbers in efficiency analysis: An application to the Indonesian banking sector

Abstract

• This is a working paper. ABSTRACT:In one of the first stand-alone studies covering the whole of the Indonesian Under the SORM SBM model, however, large banks' performance is not significantly different from that of the medium-sized banks when equity capital is used as the risk control variable, although the medium-sized banks do out-perform small banks.Moreover, when loan loss provisions are used as the risk control variable, mediumsized banks are shown to significantly out-perform both large and small banks, with the large banks being the least efficient.JEL Classification: C23; C52; G21

Factors Affecting Loan Supply Behavior At The Sharia Business Unit Of Bank Sulselbar

“…That is why, it can be said that there is a tight relationship between Islamic deposit funds and the volume of sharia financing as amplified by some literature (e.g. Hadad et al, 2012 andKamil et al, 2013).…”

“…This is also the same with the statistical result given in Table 6. It is believed that the amount of cash that is placed on the cash account could reduce the availability of funds to support sharia financing activities (Ismail 2011;Hadad et al, 2012;and Mohammad, 2013). It is therefore that when the amount of the funds more put more in cash account, the total amount of sharia financing will be less.…”

“…This is a main source of funds in supporting any sharia financing decision made by sharia banks and sharia business units (Hadad et al, 2012). Other sources could also support for financing, but sharia deposit funds are preferred as they are easily collected and relatively cheaper than other sources of funding, like placement and borrowing funds.…”

“…Amount of funds allocated in cash account by the bank affects the volume of financing (Ismail, 2011 andHadad et al, 2012). When bank decided to allocate more funds in form of cash as a buffer to anticipate liquidity matters, the more idle funds or unproductive funds the bank has.…”

“…A bank that ever experienced shortage liquidity may allocate more funds in its cash account to anticipate such matters not to be happened again (Ismail, 2011 andMohammad, 2013). Also, If a bank can predict it fresh money needed in a day or in a certain period for liquidity buffer, the bank could allocate a few funds in cash account (Ismail, 2011Hadad et al, 2012and Panetto, 1996).…”