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Financial Crisis, IMF, and Bank Efficiency: Empirical Evidence From The Asean-4 Banking Sectors

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  • Fadzlan Sufian

    (University Putra Malaysia)

  • Muzafar Shah Habibullah

    (University Putra Malaysia)

Abstract

Despite its severity and deep influence on both the real and financial sectors, empirical evidence on the evolution of the performance of the ASEAN-4 banking sectors since the 1997-1998 Asian financial crisis is relatively scarce. By employing the Data Envelopment Analysis (DEA) approach the present study examines for the first time the impact of the Asian financial crisis on the efficiency of the ASEAN-4 countries banking sectors. This study focuses on two major approaches vis. intermediation and revenue approaches. The empirical findings suggest that the estimates of technical efficiency are consistently higher under the revenue approach. We find that banks are relatively inefficient in a more concentrated banking market. However, when we control for countries that participate in IMF program, the concentration ratio exhibits a positive relationship with bank efficiency levels, implying that the more concentrated banking system which participates in IMF program is relatively more efficient in their intermediation function during the post crisis period.

Suggested Citation

  • Fadzlan Sufian & Muzafar Shah Habibullah, 2009. "Financial Crisis, IMF, and Bank Efficiency: Empirical Evidence From The Asean-4 Banking Sectors," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 12(2), pages 123-150, October.
    • Handle: RePEc:idn:journl:v:12:y:2009:i:2e:p:123-150
    DOI: https://doi.org/10.21098/bemp.v12i2.369
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    More about this item

    Keywords

    Bank; Efficiency; DEA; ASEAN;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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