Eﬃciency Determinant Analysis in Islamic Bank in Indonesia

Devi, Abrista; Firmansyah, Irman

doi:10.18326/muqtasid.v11i2.104-116

Cited by 7 publications

(11 citation statements)

References 17 publications

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“…The most efficient bank was the full-fledged Islamic Bank with the most significant asset ownership, BSM. This finding is consistent with previous studies, such as those by Devi & Firmansyah (2020), Darlis & Utary (2022), Jiménez-Hernández et al (2019, Kamarudin et al (2019), andLotto (2019), which suggest that larger banks have more resources and capabilities that can positively impact efficiency. This condition is due to several factors, such as larger companies having more resources like capital, labor, and technology to enhance their operational performance, better risk management capabilities, and more significant opportunities to improve efficiency through broader market access and economies of scale (Darlis & Utary, 2022;Devi & Firmansyah, 2020;Miftahurrohman, 2019).…”

Section: Discussionsupporting

confidence: 93%

“…This result means that profitability significantly impacts the efficiency of the Islamic banks (Sari & Saraswati, 2017;Bayuny & Haron, 2017). However, the findings of this research are in contrast with those of Miftahurrohman (2019), Devi & Firmansyah (2020), and Koiri & Erdkhadifa (2022), who found that profitability does not have a significant impact on efficiency. Meanwhile, research conducted by Darlis & Utary (2022) found that profitability has a negative impact on efficiency.…”

Section: Discussioncontrasting

confidence: 90%

“…Sahrullah & Suprayogi (2022) state that efficiency can be influenced by factors beyond those used in efficiency analysis. Previous studies have revealed that firm size can have a positive impact on efficiency, as demonstrated in research by Jiménez-Hernández et al (2019), Kamarudin et al (2019), Liviawati et al (2019), Lotto (2019, Devi & Firmansyah (2020), and Darlis & Utary (2022).…”

Section: Figure 2 Operational Cost To Operational Income Ratio Of Eac...mentioning

confidence: 90%

“…However, Darlis & Utary's (2022) findings suggest that profitability negatively affects efficiency. Conversely, the studies conducted by Miftahurrohman (2019) and Devi & Firmansyah (2020) found that profitability has little impact.…”

Section: Figure 2 Operational Cost To Operational Income Ratio Of Eac...mentioning

confidence: 95%

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Determinant of Efficiency in the Indonesian Islamic Banks

2023

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This study aims to analyze the factors that influence the level of efficiency of Islamic commercial banks in Indonesia. The research employs a panel data analysis and a non-parametric Data Envelopment Analysis (DEA) to measure the level of efficiency. The panel data analysis showed that company size, profitability, liquidity, and management significantly affect the level of efficiency of Islamic banks in Indonesia, while capital and financing risk have no significant impact. The efficiency of Islamic banks in Indonesia should be maintained by balancing the distribution of assets, ensuring portfolio diversification, maintaining sufficient liquidity, and paying attention to management quality. The originality of this study, to the best of the author's knowledge, is that it is the first study to examine the determinants of efficiency in Indonesian Islamic commercial banks using quarterly data from the period of 2015-2020. As a result, the data analyzed has a sufficient amount.JEL Classification: C02, C14, C23, G01How to Cite:Aliyah, H., Hamid, A., & Al Arif, M. N. R. (2023). Determinants of Efficiency in the Indonesian Islamic Banks. Signifikan: Jurnal Ilmu Ekonomi, 12(1), 161-174. https://doi.org/10.15408/sjie.v12i1.30376.

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Section: Discussionsupporting

confidence: 93%

Section: Discussioncontrasting

confidence: 90%

Section: Figure 2 Operational Cost To Operational Income Ratio Of Eac...mentioning

confidence: 90%

Section: Figure 2 Operational Cost To Operational Income Ratio Of Eac...mentioning

confidence: 95%

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Determinant of Efficiency in the Indonesian Islamic Banks

2023

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“…Efficiency is becoming a key indication for the banking sector's contribution to a country's financial system stability (Devi & Firmansyah, 2020). According to Mirzaei and Moore (2014), industries that rely significantly on bank financing will grow quicker and be boosted by the emergence of new busineses in nations with effective banking systems.…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of Covid-19 on the banking industry efficiency: Comparison between Indonesia and Malaysian banks

Riani¹,

Ikhwan

2022

Asian. J. Islam. Manag.

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Purpose − This study aims to measure and compare the efficiency of Islamic and conventional banks in Indonesia and Malaysia, from 2015 to 2020.Methodology − Data Envelopment Analysis (DEA) was employed as a research method for measuring efficiency. The DEA results are also used to identify input or output variables that must be improved if the Decision-Making Unit (DMU) needs to improve efficiency in form of potential improvement.Findings − This study shows that Covid-19 had an impact on decreasing the efficiency level of Indonesian and Malaysian Banks. This study also shows that Indonesian Banks are relatively efficient compared to Malaysian Banks. Nevertheless, Islamic bank is more affected by Covid-19 compared to conventional. In addition, the most important variable performance to be improved by banks during the Covid-19 pandemic is total financing.Implication − It can be used as a guideline for both nations to improve their shortcomings in each type of bank and to strengthen the banking system during economic downturns in order to speed up the recovery process.Originality − This is the initial study to examine the banking efficiency of Indonesia and Malaysia during the covid pandemic-induced economic crisis. As a result, it is expected to capture the impact of the covid-19 epidemic on banking efficiency.

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The efficiency level of Indonesian banks in the Covid-19 pandemic era and its determinant

Ikhwan¹,

Riani²

2022

J. Eko. Keu. Isl.

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Purpose – This study aims to measure the efficiency level of Indonesian Banking in the period 2015-2020, especially in the year 2020 when the Covid-19 pandemic began to spread in Indonesia. In addition, the efficiency determinant was further analyzed to find some factors that affect banking efficiency.Methodology – Non-parametric approach-Data Envelopment Analysis (DEA) and Tobit Regression were employed as the research methods to determine determinants that affect efficiency level.Findings – The findings show that the efficiency level of Indonesian Banks experienced a decreasing trend in 2020. The impact of Covid-19 on banking efficiency was also confirmed by RTS, which was included in the Decreasing Return to Scale (DRS) category. Islamic banking scored a higher score of 0.66 than conventional banking, with a score of 0.59. In addition, Indonesian Banks' most crucial variable to be improved during the pandemic is total financing. This study also found that ROA and LDR/FDR significantly affects banking efficiency. Therefore, Indonesian Banks should maintain and increase their bank profitability and financing distributions to improve their efficiency.Implication – This research can be used as guidelines for policymakers, especially bank management, to improve their weaknesses in terms of banking efficiency. Originality – This study was the first research that focuses on measuring the efficiency of Islamic banks compared to conventional banks in Indonesia during the Covid-19 and precisely measures the bank's internal factors affecting bank efficiency.

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Eﬃciency Determinant Analysis in Islamic Bank in Indonesia

Cited by 7 publications

References 17 publications

Determinant of Efficiency in the Indonesian Islamic Banks

Determinant of Efficiency in the Indonesian Islamic Banks

The impact of Covid-19 on the banking industry efficiency: Comparison between Indonesia and Malaysian banks

The efficiency level of Indonesian banks in the Covid-19 pandemic era and its determinant

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