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Banks total factor productivity change in a developing economy: Does ownership and origins matter?

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  • Sufian, Fadzlan

Abstract

This paper employs the Malmquist Productivity Index (MPI) method to analyze the productivity of the Malaysian banking sector during the period 1995-2004. The empirical findings indicate that the Malaysian banking sector has exhibited productivity regress due to technological regress rather than efficiency decline. We find that the foreign banks have exhibited productivity regress, while their domestic peers have exhibited a marginal productivity increase. During the period under study, productivity levels seems to be positively associated with the stock exchange listed banks, but is negatively related to foreign ownership. In essence, the findings provide support to the home field advantage and the "limited form" of the global advantage hypotheses. On the other hand, the empirical findings seem to reject the 'liability of unfamiliarness' hypothesis.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 22 (2011)
Issue (Month): 1 (February)
Pages: 84-98

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Handle: RePEc:eee:asieco:v:22:y:2011:i:1:p:84-98

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Web page: http://www.elsevier.com/locate/asieco

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Keywords: Bank ownership Productivity change Malmquist productivity index Panel regression analysis Malaysia;

References

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Cited by:
  1. Gerhardus Van Der Westhuizen, 2012. "Estimating Productivity Change in South African Banks: Decomposing Productity Index Numbers," Ekonomia, Cyprus Economic Society and University of Cyprus, vol. 13(2-1), pages 65-86, Winter-Su.
  2. Boon Lee, 2013. "Productivity Performance of Singapore’s Retail Sector: A Two-Stage Non-Parametric Approach," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 43(1), pages 67-78, March.
  3. Boon L Lee, 2012. "Efficiency and Productivity of Singapore's Manufacturing Sector 2001-2010: An analysis using Simar and Wilson's (2007) bootstrapped truncated approach," School of Economics and Finance Discussion Papers and Working Papers Series 283, School of Economics and Finance, Queensland University of Technology.

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