The determinants of Bank Cost Inefficiency in ASEAN Banking
This study examines the determinants of cost inefficiency of banks operating in 6 member countries of the Association of Southeast Asian Nations (ASEAN): Indonesia, Malaysia, Singapore, Thailand, the Philippines, and Vietnam. First, we estimate the cost inefficiency using the Stochastic Frontier An...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2012
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| Online Access: | http://journalarticle.ukm.my/6380/ http://journalarticle.ukm.my/6380/1/Fast_color_scan_to_a_PDF_file_6.DOC |
| _version_ | 1848811131664072704 |
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| author | Izah Mohd Tahir, Abdul Mongid, Sudin Haron, |
| author_facet | Izah Mohd Tahir, Abdul Mongid, Sudin Haron, |
| author_sort | Izah Mohd Tahir, |
| building | UKM Institutional Repository |
| collection | Online Access |
| description | This study examines the determinants of cost inefficiency of banks operating in 6 member countries of the Association of Southeast Asian Nations (ASEAN): Indonesia, Malaysia, Singapore, Thailand, the Philippines, and Vietnam. First, we estimate the cost inefficiency using the Stochastic Frontier Analysis. Second, we regress the estimated cost inefficiencies on a set of bank specific variables (size, equity to total asset, loan to total asset, personnel expenses to total expenses) and environmental variables (corruption, economic growth and economic freedom) using a Tobit regression analysis. We use a panel dataset of 625 banks in the ASEAN countries for the period from 2003 to 2008. Our results show that the average cost inefficiency during the period is about 33% of the observed total costs. Banks in Singapore exhibit the lowest cost inefficiency relative to banks in the other ASEAN countries. Our second stage results suggest that bank specific variables and economic growth are important determinants of bank cost inefficiencies in ASEAN banking. The impact of corruption and economic freedom is also evident, but only to a limited extent. |
| first_indexed | 2025-11-14T23:41:32Z |
| format | Article |
| id | oai:generic.eprints.org:6380 |
| institution | Universiti Kebangasaan Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T23:41:32Z |
| publishDate | 2012 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | oai:generic.eprints.org:63802013-07-01T03:08:02Z http://journalarticle.ukm.my/6380/ The determinants of Bank Cost Inefficiency in ASEAN Banking Izah Mohd Tahir, Abdul Mongid, Sudin Haron, This study examines the determinants of cost inefficiency of banks operating in 6 member countries of the Association of Southeast Asian Nations (ASEAN): Indonesia, Malaysia, Singapore, Thailand, the Philippines, and Vietnam. First, we estimate the cost inefficiency using the Stochastic Frontier Analysis. Second, we regress the estimated cost inefficiencies on a set of bank specific variables (size, equity to total asset, loan to total asset, personnel expenses to total expenses) and environmental variables (corruption, economic growth and economic freedom) using a Tobit regression analysis. We use a panel dataset of 625 banks in the ASEAN countries for the period from 2003 to 2008. Our results show that the average cost inefficiency during the period is about 33% of the observed total costs. Banks in Singapore exhibit the lowest cost inefficiency relative to banks in the other ASEAN countries. Our second stage results suggest that bank specific variables and economic growth are important determinants of bank cost inefficiencies in ASEAN banking. The impact of corruption and economic freedom is also evident, but only to a limited extent. Penerbit Universiti Kebangsaan Malaysia 2012-12 Article PeerReviewed application/msword en http://journalarticle.ukm.my/6380/1/Fast_color_scan_to_a_PDF_file_6.DOC Izah Mohd Tahir, and Abdul Mongid, and Sudin Haron, (2012) The determinants of Bank Cost Inefficiency in ASEAN Banking. Jurnal Pengurusan (36). pp. 69-76. ISSN 0127-2713 http://pkukmweb.ukm.my/penerbit/jurus.htm |
| spellingShingle | Izah Mohd Tahir, Abdul Mongid, Sudin Haron, The determinants of Bank Cost Inefficiency in ASEAN Banking |
| title | The determinants of Bank Cost Inefficiency in ASEAN Banking |
| title_full | The determinants of Bank Cost Inefficiency in ASEAN Banking |
| title_fullStr | The determinants of Bank Cost Inefficiency in ASEAN Banking |
| title_full_unstemmed | The determinants of Bank Cost Inefficiency in ASEAN Banking |
| title_short | The determinants of Bank Cost Inefficiency in ASEAN Banking |
| title_sort | determinants of bank cost inefficiency in asean banking |
| url | http://journalarticle.ukm.my/6380/ http://journalarticle.ukm.my/6380/ http://journalarticle.ukm.my/6380/1/Fast_color_scan_to_a_PDF_file_6.DOC |