Efficiency, Productivity and Stability of Islamic Banks in Indonesia

Aam Rusydiana, Lina Marlina, Solihah S. Rahayu

2018

Abstract

The Shariah banking industry is one of the main indicators of economic development of Islamic finance in Indonesia. In the banking world including Shariah banking, the issue of efficiency and productivity measurement are the two important things that should be noted. However, the determination of limitation factor to be a benchmark of whether a company has been worked efficiently and productively becomes problems itself. This study tried to analyze the CCR models as a basic model in DEA to see the efficiency level of Shariah commercial banks in Indonesia during the period of 2011-2017. Then, this research also examined the condition of efficiency stability of each bank which are presented in quadrant of 4 group formed. The results showed that the average value of CRS (Constant Return to Scale) efficiency of a whole Shariah commercial banks in Indonesia is relatively low at 68%, while the mean standard deviation is 0.12. The results of the Malmquist Productivity Index of Islamic Commercial Banks in Indonesia showed a decline in productivity growth (TFPCH), the reason for the decline was also caused by the level of technological innovation of banking (TECHCH) and stagnation of changes in the level of efficiency (EFFCH). Therefore Islamic banks need to carry out effective strategies in the current era of technological disruption.

Paper Citation

in Harvard Style

Rusydiana A., Marlina L. and S. Rahayu S. (2018). Efficiency, Productivity and Stability of Islamic Banks in Indonesia.In Proceedings of the 4th Sriwijaya Economics, Accounting, and Business Conference - Volume 1: SEABC, ISBN 978-989-758-387-2, pages 566-572. DOI: 10.5220/0008442605660572

in Bibtex Style

@conference{seabc18,
author={Aam Rusydiana and Lina Marlina and Solihah S. Rahayu},
title={Efficiency, Productivity and Stability of Islamic Banks in Indonesia},
booktitle={Proceedings of the 4th Sriwijaya Economics, Accounting, and Business Conference - Volume 1: SEABC,},
year={2018},
pages={566-572},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0008442605660572},
isbn={978-989-758-387-2},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 4th Sriwijaya Economics, Accounting, and Business Conference - Volume 1: SEABC,
TI - Efficiency, Productivity and Stability of Islamic Banks in Indonesia
SN - 978-989-758-387-2
AU - Rusydiana A.
AU - Marlina L.
AU - S. Rahayu S.
PY - 2018
SP - 566
EP - 572
DO - 10.5220/0008442605660572