Assessing efficiency and effectiveness of Malaysian Islamic banks: A two stage DEA analysis

Norbaizura Kamarudin, Wan Rosmanira Ismail, Muhammad Azri Mohd

Research output: Chapter in Book/Report/Conference proceedingConference contribution

3 Citations (Scopus)

Abstract

Islamic banks in Malaysia are indispensable players in the financial industry with the growing needs for syariah compliance system. In the banking industry, most recent studies concerned only on operational efficiency. However rarely on the operational effectiveness. Since the production process of banking industry can be described as a two-stage process, two-stage Data Envelopment Analysis (DEA) can be applied to measure the bank performance. This study was designed to measure the overall performance in terms of efficiency and effectiveness of Islamic banks in Malaysia using Two-Stage DEA approach. This paper presents analysis of a DEA model which split the efficiency and effectiveness in order to evaluate the performance of ten selected Islamic Banks in Malaysia for the financial year period ended 2011. The analysis shows average efficient score is more than average effectiveness score thus we can say that Malaysian Islamic banks were more efficient rather than effective. Furthermore, none of the bank exhibit best practice in both stages as we can say that a bank with better efficiency does not always mean having better effectiveness at the same time.

Original languageEnglish
Title of host publicationAIP Conference Proceedings
PublisherAmerican Institute of Physics Inc.
Pages934-938
Number of pages5
Volume1602
ISBN (Print)9780735412361
DOIs
Publication statusPublished - 2014
Event3rd International Conference on Mathematical Sciences, ICMS 2013 - Kuala Lumpur
Duration: 17 Dec 201319 Dec 2013

Other

Other3rd International Conference on Mathematical Sciences, ICMS 2013
CityKuala Lumpur
Period17/12/1319/12/13

Fingerprint

Malaysia
industries

Keywords

  • Data Envelopment Analysis
  • Effectiveness
  • Efficiency
  • Islamic Banking
  • Performance Measures

ASJC Scopus subject areas

  • Physics and Astronomy(all)

Cite this

Kamarudin, N., Ismail, W. R., & Mohd, M. A. (2014). Assessing efficiency and effectiveness of Malaysian Islamic banks: A two stage DEA analysis. In AIP Conference Proceedings (Vol. 1602, pp. 934-938). American Institute of Physics Inc.. https://doi.org/10.1063/1.4882595

Assessing efficiency and effectiveness of Malaysian Islamic banks : A two stage DEA analysis. / Kamarudin, Norbaizura; Ismail, Wan Rosmanira; Mohd, Muhammad Azri.

AIP Conference Proceedings. Vol. 1602 American Institute of Physics Inc., 2014. p. 934-938.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Kamarudin, N, Ismail, WR & Mohd, MA 2014, Assessing efficiency and effectiveness of Malaysian Islamic banks: A two stage DEA analysis. in AIP Conference Proceedings. vol. 1602, American Institute of Physics Inc., pp. 934-938, 3rd International Conference on Mathematical Sciences, ICMS 2013, Kuala Lumpur, 17/12/13. https://doi.org/10.1063/1.4882595
Kamarudin N, Ismail WR, Mohd MA. Assessing efficiency and effectiveness of Malaysian Islamic banks: A two stage DEA analysis. In AIP Conference Proceedings. Vol. 1602. American Institute of Physics Inc. 2014. p. 934-938 https://doi.org/10.1063/1.4882595
Kamarudin, Norbaizura ; Ismail, Wan Rosmanira ; Mohd, Muhammad Azri. / Assessing efficiency and effectiveness of Malaysian Islamic banks : A two stage DEA analysis. AIP Conference Proceedings. Vol. 1602 American Institute of Physics Inc., 2014. pp. 934-938
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