Applying a non-parametric Malmquist Productivity Index (MPI) method, this paper attempts to investigate the productivity changes of Malaysian banks during the post crisis period of 1998-2003. Our results suggest that: (1) Malaysian banking sector have exhibit productivity regress of 6.3% and that the productivity regressed during the period of study was largely attributed to Technological (6.1%) rather than Technical Efficiency (0.2%) regress. (2) Malaysian banks regardless of size have exhibit productivity regress ranging from 1.5% to as high as 10.0% and (3) The smallest bank in our sample is too small to reap the benefits of economies of scale, while the largest bank in our sample, is too large to be scale efficient.
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Find related papers by JEL classification: G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
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