Article Sidebar

Download
PDF
Statistic
Read Counter : 31 Download : 34

Downloads

Download data is not yet available.

Main Article Content

Abstract

Abstract. This study compares ASEAN and EU banking efficiency using Data Envelopment Analysis (DEA) and an intermediary approach. Three input variables (staff expense, fixed assets, total customer deposits) and two output variables (loans to customer and operating income other than interest) are analyzed using RStudio and R. EU and ASEAN banks had efficiency scores of 0.7 and 0.65, respectively, showing opportunity for improvement. Based on cost analyses, ASEAN banks are more efficient than their EU counterparts. Inefficiencies occur when output surpasses input or is much lower than another output variable. However, both regions may improve banking efficiency to do better. The 10-year trends exhibit oscillations, showing that regulatory issues affect banking efficiency. Stricter laws, higher capital requirements, and risk management changes may have hampered ASEAN credit. The dynamics and objectives of the EU and ASEAN economic blocs shape their financial systems. ASEAN is working toward regulatory convergence, while the EU has integrated and harmonized more. To maintain a stable and efficient financial industry, the region's banks must adapt to changing economic landscapes, technological advances, and mounting challenges.


 Keywords:  ASEAN, bank performance, data envelopment analysis, efficiency, EU

Keywords

Bank Performance Data Envelopment Analysis Efficiency ASEAN EU

Article Details

License
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Copyright @2017. This is an open-access article distributed under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License (http://creativecommons.org/licenses/by-nc-sa/4.0/) which permits unrestricted non-commercial used, distribution and reproduction in any medium 

How to Cite
Putri, J. A., Sudrajad, O. Y., & Kabir, R. (2023). Evaluating ASEAN and EU Banking Sector Efficiency Using DEA (Data Envelopment Analysis) . The Asian Journal of Technology Management (AJTM), 16(2), 121–135. https://doi.org/10.12695/ajtm.2023.16.2.4
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX

References

  1. Alber N, Elmofty M, Walied I, Sami R. (2019). Banking Efficiency: Concepts, Drivers, Measures, Literature and Conceptual Model. SSRN Electronic Journal
  2. Andreeva, D., Desiswava, P., et al. (2019). Euro area bank profitability: where can consolidation help? https://www.ecb.europa.eu/pub/financial-stability/fsr/special/html/ecb.fsrart201911_01~81377050be.en.html. [accessed on 09 September 2023].
  3. Ariyasajjakorn, D., Sirivunnabood, P., & et al. (2020). Evvolution of ASEAN Financial Integration in the Comparative Perspective. Asian Development Bank Institute.
  4. Aziz, Zeti Akhtar. (2012). ASEAN: Toward a more integrated market. Governor’s Keynote Address at the 19th ASEAN Banking Conference. Retrieved from https://www.bnm.gov.my/-/governor-s-keynote-address-at-the-19th-asean-banking-conference-2012-asean-towards-a-more-integrated-market-. [accessed on 09 September 2023].
  5. Bank Nasional Malaysia Quarter Bulletin. (2016). Retrieved from https://www.bnm.gov.my/documents/20124/771988/4Q2016_fullbook_en.pdf. [accessed on 09 September 2023].
  6. Bauer, P., Berger, A., Ferrier, G. & Humphrey, D. (1998). Consistency Conditions for Regulatory Analysis of Financial Institutions: A Comparison of Frontier Efficiency Methods. Journal of Economics & Business 50 (2), 85-114.
  7. Binder, Krisztina. (2020). Trade Negotiations between the EU and ASEAN Member States. https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2020)659337. [accessed on 09 September 2023].
  8. Bogetoft, P., & Otto, L. (2010). Benchmarking with DEA, SFA, and R. New York: Springer.
  9. Charnes, A., Cooper, W. & Rhodes, E. (1978). Measuring the efficiency of decision-making units. European Journal of Operational Research, 2, 429–444.
  10. Coelli, T., Rao, D & Battese, G. (1998). An introduction to efficiency and productivity analysis. Kluwer Academy, Boston.
  11. Committee on the Global Financial System. (2018). Structural changes in banking after the crisis. New York: Bank for International Settlements.
  12. Cvilikas, A. & Jurkonyte-Dumbliauskiene, E. (2016). Assessment of Risk Management Economic Efficiency Applying Economic Logistic Theory. Transformations in Business & Economics 15, 207–19.
  13. Diallo, B., (2018). Bank Efficiency And Industry Growth During Financial Crises. Economic Modelling 68: 11–22
  14. European debt crisis. (2023). In Wikipedia. https://en.wikipedia.org/wiki/European_debt_crisis. [accessed on 09 September 2023)
  15. European Commission. (2017). Blue Book EU-ASEAN. European Union,
  16. European Union. (2013). The Economic Adjustment Programme for Portugal Eighth and Ninth Review. European Commission: Directorate-General for Economy and Financial Affairs.
  17. Faturohman, M., Maharani, R., et al. (2019). Data Envelopment Analysis (DEA) Efficiency Of Islamic Banks In ASEAN: A Cross-Country Comparative Examination Of Intermediation And Production Efficiency Approach. Jurnal Ilmiah Manajemen Bisnis Dan Inovasi Universitas Sam Ratulangi, 6(3).
  18. International Monetary Fund. (2013). IMF Country Report No. 13/151, Libya: Selected Issues, May 2, 2013. Retrieved from https://www.imf.org/external/pubs/ft/scr/2013/cr13151.pdf. [accessed on 09 September 2023]
  19. Jaouadi, S. (2014). Exploring the Effectiveness and Efficiency of Banks in Switzerland.
  20. International Journal of Academic Research in Business and Social Sciences. 4, 313-325
  21. Jones Day. (2016). The ASEAN Economic Community: Investment Opportunities and Challenges in the World's Newest Market. Retrieved from https://www.jonesday.com/en/insights/2016/02/the-asean-economic-community-investment-opportunities-and-challenges-in-the-worlds-newest-market [accessed on 09 September 2023].
  22. KPMG. (2021). European Banking Consolidation. Retrieved from https://kpmg.com/xx/en/home/insights/2021/02/european-banking-consolidation.html. [accessed on 09 September 2023].
  23. Noonan, Laura & Goncalves, Sergio. 2014. https://www.reuters.com/article/us-portugal-banks-outlook/post-bailout-portugals-banks-must-prove-the-worst-is-over-idUSKBN0EZ0TR20140624 [accessed on 09 September 2023
  24. OECD Economic Surveys: Italy 2021. https://www.oecd-ilibrary.org/sites/b76a212b-en/index.html?itemId=%2Fcontent%2Fcomponent%2Fb76a212b-en#section-d1e2364 [accessed on 09 September 2023].
  25. Oesterreichische Nationalbank. (2023). Facts on Austria and Its Banks. Retrieved from https://www.oenb.at/en/Publications/Financial-Market/Facts-on-Austria-and-Its-Banks.html. [accessed on 09 September 2023].
  26. Reuters. (2015). Central Bank Warns Over Finland’s Financial System. https://www.reuters.com/article/finland-banks/central-bank-warns-over-finlands-financial-system-idUSL5N0YC1F820150521. [accessed on 09 September 2023].
  27. Sealey, C. & Lindley, J. (1977). Inputs, Outputs and Theory of Production Cost at Depository Financial Institutions. Journal of Finance 32 (4) 1251-1266.
  28. Statista Research Department. (2019). Banking Industry in Thailand- Statistics and Facts. Retrieved from https://www.statista.com/topics/8709/banking-in-thailand/#topicOverview [accessed on 09 September 2023].
  29. Statista Research Department. (2020). Annual return on equity for the banking system in Denmark from 2011 to 2019. https://www.statista.com/statistics/810506/banking-system-return-on-equity-denmark-europe-eu/ [accessed on 09 September 2023].
  30. Statista Research Department. (2022). Share of total bank assets under foreign ownership in Denmark 2011-2019. https://www.statista.com/statistics/810542/bank-assets-under-foreign-ownership-denmark-europe-eu/ [accessed on 09 September 2023].
  31. Wilcox, R.R. (1997). Introduction to Robust Estimation and Hypothesis Testing. San Diego, CA: Academic Press.
  32. Worldbank. (2017). Philippines Economic Update April 2017. https://www.worldbank.org/en/news/feature/2017/05/04/philippines-economic-update-april-2017 [accessed on 09 September 2023].
  33. Yuen, K.K. (1974). The Two-Sample Trimmed T For Unequal Population Variances. Biometrika, 61, 165-170.
  34. Zhang, et al. (2020). Big-data-driven low-carbon management. Elsevier: Big Data Mining for Climate Change 287-289.