Financial Crisis, Exchange Rate Regimes, Organizational Forms, and Bank Efficiency: Does Globalization Matter?

Abstract

The article provides new empirical evidence on the impact of economic globalization on the efficiency of the banking sector. The analysis is confined into two stages. In the first stage, we employ the bias corrected data envelopment analysis method to compute the efficiency of individual banks during the period 1999-2008. We then use bootstrap regressions to examine the impact of economic globalization on bank efficiency, while controlling for the potential impacts of contextual variables. The empirical findings indicate that liberalization (restrictions) of the trade and capital account exerts positive (negative) influence on the efficiency of Malaysian banks. Likewise, the impacts of better personal contacts and information flows seem to work in favor of Malaysian banks' efficiency. The empirical findings also bring forth the importance of cultural proximity in determining the efficiency of banks operating in the Malaysian banking sector.

Does globalisation have an impact on dual banking system productivity in selected Southeast Asian banking industry?

“…Western culture has grown rapidly its effect on all facets of global life including growth in the economy. Majority of previous study suggested that CuGI had a favourable effect on productivity in the banking sector (Sufian et al , 2017; Sufian and Habibullah, 2014; Sufian, 2016).…”

“…NIETA is used to measure the quality of bank administration and operations and can be defined as the ratio of non-interest expenses to the amount of total assets. Several studies such as Muda et al (2013) and Sufian (2016) confirm the adverse relationship between NIETA and performance. Notwithstanding, economic growth significantly and negatively affect bank productivity in Islamic banks.…”