Analysis of the efficiency performance of Sharia and conventional banks using stochastic frontier analysis Cover Image

Analysis of the efficiency performance of Sharia and conventional banks using stochastic frontier analysis
Analysis of the efficiency performance of Sharia and conventional banks using stochastic frontier analysis

Author(s): Isfenti Sadalia, Muhammad Haikal Kautsar, Nisrul Irawati, Iskandar Muda
Subject(s): Economy, Business Economy / Management, Financial Markets
Published by: ТОВ “Консалтингово-видавнича компанія “Ділові перспективи”
Keywords: bank; stochastic frontier analysis; technical efficiency

Summary/Abstract: There are two sectors of banks operating in Indonesia, namely Sharia banks and conventional banks. Improving performance is important in maintaining public confidence in the bank. Efficiency is one of the parameters to measure the performance of Sharia banks. This study measures the comparative level of technical efficiency of Sharia commercial banks and conventional banks by Stochastic Frontier Analysis method during 2011–2015 period by using 10 samples of Sharia commercial banks and conventional banks. Input variables in this study are total deposits, operational costs, and other operational costs. Total financing is an output variable. The results of this study show that total deposits and operational costs have a positive and significant impact on total financing in Sharia and conventional banks. The average score of the technical efficiency of Sharia commercial banks during the period observed is 0.84 and conventional banks is 0.85.

  • Issue Year: 13/2018
  • Issue No: 2
  • Page Range: 27-38
  • Page Count: 12
  • Language: English