al-Uqud : Journal of Islamic Economics
Vol. 3 No. 2 (2019): July

TECHNICAL EFFICIENCY LEVEL OF ISLAMIC BANK IN INDONESIA

Alfu Laila Fiafifah (Departmentof Economics and Development Studies, Faculty of Economics andBusiness, Universitas Diponegoro)
Darwanto Darwanto (Departmentof Economics and Development Studies, Faculty of Economics andBusiness, Universitas Diponegoro)



Article Info

Publish Date
16 Jul 2019

Abstract

One of the common measurements used to evaluate a companys performance is the efficiency performance which indicates a companys efficiency score in utilizing inputs to produce outputs. This study aims to evaluate the performance of state-owned Indonesian Islamic banks by measuring their technical efficiency along with the determinant factors of their efficiency over the period 2014-2017. In this study, DEA, a non-parametric technique method, is employed to measure the efficiency of four state-owned Indonesia Islamic banks. Another method, Tobit-regression, is used to identify the determinant factors of their efficiency. Four state-owned Indonesian Islamic banks are chosen as the object of this study, namely Bank Syariah Mandiri, BNI Syariah , Bank Rakyat Indonesia Syariah, and BTN Syariah. The results of calculation using DEA methos show that the average efficiency level of all state-owned Indonesian Islamic banks over four consecutive yerars is 100%. It means that all the state-owned Indonesian Islamic banks operating in Indonesia have been able to optimize all their resources and are considered efficient over the period 2014-2017. Tobit-regression model results show that bank size, capitalization, and profitability significantly affect all state-owned Islamic banks efficiency, while bank expenses do not have a significant effect on their efficiency.

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Journal Info

Abbrev

jie

Publisher

Subject

Economics, Econometrics & Finance

Description

al-Uqûd : Journal of Islamic Economics published by the Islamic Economic Studies Department of Economics Faculty of Economics, Universitas Negeri Surabaya in cooperation with the Forum of Economic and Business Lecturer Islam (FORDEBI). al-Uqûd published twice a year, in January and July. The ...