• Siti Annita Otaviya Airlangga University, Indonesia
  • Lina Nugraha Rani Airlangga University, Indonesia
Keywords: Determinant, Islamic banks, Total factor productivity, Malmquist productivity index


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 analyse the 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.

Author Biography

Lina Nugraha Rani, Airlangga University, Indonesia

Department of Sharia Economy, Faculty of Economy and Business, Airlangga University


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How to Cite
Otaviya, S., & Rani, L. (2020). PRODUCTIVITY AND ITS DETERMINANTS IN ISLAMIC BANKS: EVIDENCE FROM INDONESIA. Journal of Islamic Monetary Economics and Finance, 6(1), 189 - 212.