The Impact of Economic Turbulence on Local Bank Efficiency: Does Common Wisdom Hold?

DOI

10.2991/miceb-17.2018.1How to use a DOI?

Keywords

productivity; banking; data envelopment analysis; bootstrap; malmquist indices

Abstract

Common theory suggests that banking performance is positively related to economic growth. This common wisdom is further tested by investigating whether economic turmoil has a meaningful impact on local bank technical efficiency. This study uses Regional Development Banks (RDB) data in Indonesia as a case study during 2005 to 2015. The analysis is conducted using two stage approaches in which Data Envelopment Analysis (DEA) is used in the first stage, whilst in the second stage pooled OLS regression is employed. The findings show that most of local banks are technically inefficient throughout the period of analysis. Furthermore, the results indicate that crisis tends to have a significant effect, while the rest of the variables show various level of magnitude on local bank efficiency.

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Felisitas Defung
AU  - Rizky Yudaruddin
AU  - Syarifah Hudayah
PY  - 2017/10
DA  - 2017/10
TI  - The Impact of Economic Turbulence on Local Bank Efficiency: Does Common Wisdom Hold?
BT  - Proceedings of the Mulawarman International Conference on Economics and Business (MICEB 2017)
PB  - Atlantis Press
SP  - 1
EP  - 5
SN  - 2352-5428
UR  - https://doi.org/10.2991/miceb-17.2018.1
DO  - 10.2991/miceb-17.2018.1
ID  - Defung2017/10
ER  -