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Productivity And Its Determinant Of Islamic Banks Evidence From Indonesia

Author

Listed:
  • Siti Annita Otaviya

    (UNIVERSITAS AIRLANGGA)

  • Lina Nugraha Rani

    (UNIVERSITAS AIRLANGGA)

Abstract

This study aims to determine the level of productivity of Islamic banks in Indonesia during the period 2011-2018 using indicators of Total Factor Productivity Change (TFPCH) or changes in productivity, and to identify potential determinants of TFPCH. In the first stage, the Malmquist Productivity Index (MPI) is employed to analysethe TFPCH of eight Islamic banks operating between 2011 and 2018. In the second stage, panel data regression is applied to assess the potential determinants of TFPCH. The research findings show that Indonesian Islamic banks experience productivity growth, and that the Technical/Technological Change (TECHCH) component has had a significant influence on this growth, with the GDP and BI rate variables being potential determinants of TFPCH. The research contributes to the renewal of interest in studies of Islamic bank productivity performance in Indonesia, and is accompanied by analysis of the specific determinants of the potential of private banks and the macroeconomics of productivity, research on which is still limited in the related literature.

Suggested Citation

  • Siti Annita Otaviya & Lina Nugraha Rani, 2020. "Productivity And Its Determinant Of Islamic Banks Evidence From Indonesia," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 6(1), pages 189-212, February.
    • Handle: RePEc:idn:jimfjn:v:6:y:2020:i:1i:p:189-212
    DOI: https://doi.org/10.21098/jimf.v6i1.1146
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    More about this item

    Keywords

    Determinant; Islamic banks; Total factor productivity; Malmquist productivity inde;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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