Open AccessADVANCEMENT AND SETBACK IN ISLAMIC BANKING PRODUCTIVITY IN ASEAN: DO TECHNOLOGICAL CHANGES MATTER?
Author(s) -
Aam Slamet Rusydiana,
Aisyah As-Salafiyah
Publication year - 2021
Publication title -
journal of islamic monetary economics and finance
Language(s) - English
Resource type - Journals
eISSN - 2460-6146
pISSN - 2460-6618
DOI - 10.21098/jimf.v7i3.1322
Subject(s) - productivity , data envelopment analysis , total factor productivity , islam , setback , malmquist index , index (typography) , business , islamic banking , technological change , economics , economic growth , political science , geography , macroeconomics , computer science , mathematics , statistics , archaeology , world wide web , law
This study applies the Banker, Charnes and Cooper (BCC) model as a basic approach to the data envelopment analysis used to measure the level of productivity of 24 Islamic banks in four ASEAN countries (Indonesia, Malaysia, Brunei Darussalam and Thailand) over the 2010-2019 period. The Malmquist index was also employed, which is intended to accommodate improvements in efficiency, together with advancementsin technology. According to the Malmquist index scores on total factor productivity (TFP) change, 17 of the 24 Islamic banks (or 70.8 percent) achieved an improvement in productivity over the research period, with Thailand recording the highest productivity level increase. Overall, the most productive Islamic bank was Affin Islamic Bank Berhad. Finally, it was observed that there was a productivity growth in the last two years of the period, namely 2017-2018 and 2018-2019. The productivity change was driven more by efficiency than by technology, implying that Islamic banks in ASEAN countries must improve this aspect.