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Productivity and Technical Change in Malaysian Banking: 1989–1998

Productivity and Technical Change in Malaysian Banking: 1989–1998 This study examines the impact of deregulation and technological change on the productivity of Malaysian banks over the period 1989–1998. Malmquist indices constructed with nonparametric DEA techniques are decomposed into their pure efficiency, scale efficiency, and technological change components. Our findings indicate an erosion of banking productivity that masks divergent tendencies among its component elements. These are dominated by adverse effects of technological change, which are associated with a reduction in the labor intensity of banking activity. Consistent with the mixed findings reported in the literature, the present investigation suggests that regulatory reform and liberalization are not sufficient conditions for productivity improvement. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asia-Pacific Financial Markets Springer Journals

Productivity and Technical Change in Malaysian Banking: 1989–1998

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References (42)

Publisher
Springer Journals
Copyright
Copyright © 2005 by Springer Science + Business Media, Inc.
Subject
Finance; Finance, general; Macroeconomics/Monetary Economics//Financial Economics; International Economics; Econometrics; Economic Theory/Quantitative Economics/Mathematical Methods
ISSN
1387-2834
eISSN
1573-6946
DOI
10.1007/s10690-005-6011-3
Publisher site
See Article on Publisher Site

Abstract

This study examines the impact of deregulation and technological change on the productivity of Malaysian banks over the period 1989–1998. Malmquist indices constructed with nonparametric DEA techniques are decomposed into their pure efficiency, scale efficiency, and technological change components. Our findings indicate an erosion of banking productivity that masks divergent tendencies among its component elements. These are dominated by adverse effects of technological change, which are associated with a reduction in the labor intensity of banking activity. Consistent with the mixed findings reported in the literature, the present investigation suggests that regulatory reform and liberalization are not sufficient conditions for productivity improvement.

Journal

Asia-Pacific Financial Markets – Springer Journals

Published: Jun 10, 2005

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