Malmquist Index To Measure the Efficiency and Productivity of Indonesia Islamic Banks

Marlina, Lina and Rusydiana, Aam Slamet and Otoillah, Muhammad Anton (2018) Malmquist Index To Measure the Efficiency and Productivity of Indonesia Islamic Banks. In: UNSPECIFIED.

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Abstract

The development ofIslamicbanking industry today is one of the main indicators of economic development ofIslamicfinance in general in Indonesia. In thebanking world, including Islamicbanking, the issue of efficiency and productivity measurement are two important things. This study attempts to analyze theBCCmodel as a base model forDEA to see the efficiency level of Islamiccommercial banks(Bank Umum Syariah/BUS)in Indonesia for 2012-2017period. Furthermore,Malmquistindexis usedto seethe productivity level ofIslamicbank, both in terms of changes of itsefficiency andalso itstechnological change which is then displayed in the form offour quadrant groups.The results obtained from theMalmquistindex score (TFPChange)showthat 9Islamicbanks out of 11 BUShave increased productivity, or about 82% of all Islamic commercial banks. For groups of bank analysiswith efficiency change criterion (EFFCH) and technological change (TECH), there is 1islamicbankin quadrant 1 (technical change andhigh-efficiencychange), there are 4Islamicbankin quadrant 2 (technical change high but low efficiency change), and 6 Islamicbanks that enter into quadrant 3 (technical change is low buthigh-efficiencychange). Meanwhile, none of the Islamicbanks are in the quadrantgroup4.Keywords: Efficiency, Productivity, DEA, Malmquist Index, Indonesia Islamic Bank

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