{"id":4206,"date":"2021-06-13T13:57:29","date_gmt":"2021-06-13T05:57:29","guid":{"rendered":"https:\/\/www.ukm.my\/jem\/?post_type=article&#038;p=4206"},"modified":"2022-07-27T11:17:33","modified_gmt":"2022-07-27T03:17:33","slug":"determinants-of-bank-efficiency-evidence-from-regional-development-banks","status":"publish","type":"article","link":"https:\/\/www.ukm.my\/jem\/article\/determinants-of-bank-efficiency-evidence-from-regional-development-banks\/","title":{"rendered":"Determinants of Bank Efficiency: Evidence from Regional Development Banks"},"content":{"rendered":"<p><span class=\"fontstyle0\">This study examines the technical efficiency level of regional development banks (<\/span><span class=\"fontstyle0\">RDB<\/span><span class=\"fontstyle0\">s) in Indonesia and then analyzes the influence of bank-specific factors on this efficiency. This study uses data from all 25 conventional <\/span><span class=\"fontstyle0\">RDB<\/span><span class=\"fontstyle0\">s in Indonesia for the period 2012\u20132017 and a two-stage procedure to examine bank efficiency. Data Envelopment Analysis (<\/span><span class=\"fontstyle0\">DEA<\/span><span class=\"fontstyle0\">) is used to estimate bank technical efficiency and panel data techniques<\/span><span class=\"fontstyle2\">, <\/span><span class=\"fontstyle0\">both fixed effects (<\/span><span class=\"fontstyle0\">FE<\/span><span class=\"fontstyle0\">) and random effects (<\/span><span class=\"fontstyle0\">RE<\/span><span class=\"fontstyle0\">)<\/span><span class=\"fontstyle2\">, <\/span><span class=\"fontstyle0\">are used to assess the determinants of bank efficiency. The results of this study indicate that most Indonesian <\/span><span class=\"fontstyle0\">RDB<\/span><span class=\"fontstyle0\">s have yet to become efficient. The most important source of their inefficiency is non-interest income.<br \/>\nFurthermore<\/span><span class=\"fontstyle2\">, <\/span><span class=\"fontstyle0\">bank efficiency is positively influenced by capital and the loan-to-deposit ratio<\/span><span class=\"fontstyle2\">, <\/span><span class=\"fontstyle0\">while it is negatively affected by non-performing loans and the proportion of time deposits. There is also evidence that bank size has a U-shaped influence on efficiency. This study recommends that <\/span><span class=\"fontstyle0\">RDB<\/span><span class=\"fontstyle0\">s should increase the capital in improving its fee-based income through the development of innovative technology-based products and services. <\/span><span class=\"fontstyle0\">RDB<\/span><span class=\"fontstyle0\">s also need to optimize their use of depositors\u2019 funds for lending coupled with prudential principles to avoid problematic loans.<\/span><\/p>\n","protected":false},"template":"","tags":[620,477,619],"jel-code":[],"article-type":[1329],"class_list":["entry","author-jem","post-4206","article","type-article","status-publish","tag-data-envelopment-analysis-dea","tag-regional-development-bank","tag-technical-efficiency","article-type-normal-article"],"_links":{"self":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article\/4206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article"}],"about":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/types\/article"}],"version-history":[{"count":1,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article\/4206\/revisions"}],"predecessor-version":[{"id":4215,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article\/4206\/revisions\/4215"}],"wp:attachment":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/media?parent=4206"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/tags?post=4206"},{"taxonomy":"jel-code","embeddable":true,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/jel-code?post=4206"},{"taxonomy":"article-type","embeddable":true,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article-type?post=4206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}