Effect of mergerson efficiency and productivity : Some evidence for banks in Malaysia

This study is undertaken to investigate the extent to which mergers lead to efficiency by which services are provided to the public and the productivity of Malaysia’s banking institutions sector. The data cover the period 1993 to 2004, which includes the pre-merger years and the post-merger years. T...

Full description

Bibliographic Details
Main Authors:	Awang Marikan, D. A., Radam, Alias, Baharom, A.H, Ismail, Farhana
Format:	Monograph
Language:	English
Published:	Munich Personal RePEc Archive 2008
Subjects:	HB Economic Theory
Online Access:	http://ir.unimas.my/3080/ http://ir.unimas.my/3080/ http://ir.unimas.my/3080/1/MPRA_paper_12726.pdf

id	unimas-3080
recordtype	eprints
spelling	unimas-30802015-05-08T08:28:37Z http://ir.unimas.my/3080/ Effect of mergerson efficiency and productivity : Some evidence for banks in Malaysia Awang Marikan, D. A. Radam, Alias Baharom, A.H Ismail, Farhana HB Economic Theory This study is undertaken to investigate the extent to which mergers lead to efficiency by which services are provided to the public and the productivity of Malaysia’s banking institutions sector. The data cover the period 1993 to 2004, which includes the pre-merger years and the post-merger years. This study attempts to evaluate technical efficiency, efficiency change, technical change and productivity of commercial banks, finance companies and merchant banks using a non-parametric Data Envelopment Analysis (DEA) and Malmquist Index approach as the framework for the analyses. It is found that: (1) that on average, productivity across banking institutions increased at annual rate of 5.8% over the study period 1993 to 2004 ; (2) the results also indicated that almost all of the productivity growth comes from technical change (or innovations in banking technology) rather than improvement in efficiency change, which contributes for 6.1% of productivity growth, while the latter accounted for 0.2% decline; (3) the merger process led to productivity improvements whereby, it is observed that the productivity of Malaysia’s banking sector has been improved (in terms of efficiency) after the implementation of merger program for domestic banking institutions in 1999. This might be due to the utilization of their scale economies to improve their efficiencies. However, the productivity of banking institutions has been affected by certain economic conditions in year 2001 and 2004 (such as the September 11 tragedy and the process of capital rationalization that merged entities have undergone) Munich Personal RePEc Archive 2008 Monograph PeerReviewed text en http://ir.unimas.my/3080/1/MPRA_paper_12726.pdf Awang Marikan, D. A. and Radam, Alias and Baharom, A.H and Ismail, Farhana (2008) Effect of mergerson efficiency and productivity : Some evidence for banks in Malaysia. Working Paper. Munich Personal RePEc Archive. (Unpublished) http://mpra.ub.uni-muenchen.de/id/eprint/12726
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Malaysia Sarawak
building	UNIMAS Institutional Repository
collection	Online Access
language	English
topic	HB Economic Theory
spellingShingle	HB Economic Theory Awang Marikan, D. A. Radam, Alias Baharom, A.H Ismail, Farhana Effect of mergerson efficiency and productivity : Some evidence for banks in Malaysia
description	This study is undertaken to investigate the extent to which mergers lead to efficiency by which services are provided to the public and the productivity of Malaysia’s banking institutions sector. The data cover the period 1993 to 2004, which includes the pre-merger years and the post-merger years. This study attempts to evaluate technical efficiency, efficiency change, technical change and productivity of commercial banks, finance companies and merchant banks using a non-parametric Data Envelopment Analysis (DEA) and Malmquist Index approach as the framework for the analyses. It is found that: (1) that on average, productivity across banking institutions increased at annual rate of 5.8% over the study period 1993 to 2004 ; (2) the results also indicated that almost all of the productivity growth comes from technical change (or innovations in banking technology) rather than improvement in efficiency change, which contributes for 6.1% of productivity growth, while the latter accounted for 0.2% decline; (3) the merger process led to productivity improvements whereby, it is observed that the productivity of Malaysia’s banking sector has been improved (in terms of efficiency) after the implementation of merger program for domestic banking institutions in 1999. This might be due to the utilization of their scale economies to improve their efficiencies. However, the productivity of banking institutions has been affected by certain economic conditions in year 2001 and 2004 (such as the September 11 tragedy and the process of capital rationalization that merged entities have undergone)
format	Monograph
author	Awang Marikan, D. A. Radam, Alias Baharom, A.H Ismail, Farhana
author_facet	Awang Marikan, D. A. Radam, Alias Baharom, A.H Ismail, Farhana
author_sort	Awang Marikan, D. A.
title	Effect of mergerson efficiency and productivity : Some evidence for banks in Malaysia
title_short	Effect of mergerson efficiency and productivity : Some evidence for banks in Malaysia
title_full	Effect of mergerson efficiency and productivity : Some evidence for banks in Malaysia
title_fullStr	Effect of mergerson efficiency and productivity : Some evidence for banks in Malaysia
title_full_unstemmed	Effect of mergerson efficiency and productivity : Some evidence for banks in Malaysia
title_sort	effect of mergerson efficiency and productivity : some evidence for banks in malaysia
publisher	Munich Personal RePEc Archive
publishDate	2008
url	http://ir.unimas.my/3080/ http://ir.unimas.my/3080/ http://ir.unimas.my/3080/1/MPRA_paper_12726.pdf
first_indexed	2018-09-06T14:55:39Z
last_indexed	2018-09-06T14:55:39Z
_version_	1610870413132300288

Effect of mergerson efficiency and productivity : Some evidence for banks in Malaysia

Similar Items