STABILITY OF ISLAMIC BANK EFFICIENCY IN INDONESIA AND MALAYSIA: HAS COVID-19 MADE ANY DIFFERENCE?

Authors

  • Ihsanul Ikhwan International Islamic University Malaysia (IIUM), Malaysia
  • Ririn Riani Institut Agama Islam Tazkia, Indonesia

DOI:

https://doi.org/10.21098/jimf.v9i3.1526

Keywords:

Islamic banks, Efficiency, Stability, Indonesia, Malaysia.

Abstract

This study examines whether COVID-19 has affected the stability of Islamic banking efficiency in Indonesia and Malaysia using the Data Envelopment Window Analysis (DEWA) using data from 2017 to 2022. The findings indicate that Islamic banks in Malaysia exhibit a higher level of efficiency and stability as compared to their counterparts in Indonesia across all three efficiency measures, namely Technical Efficiency (TE), Pure Technical Efficiency (PTE), and Scale Efficiency (SE). In addition, the findings show that Islamic banks in both countries have stable efficiency performance over the period under investigation and hence the Covid-19 pandemic has not affected their efficiency levels. From the analysis, we further note that financing and labor costs are the main sources of inefficiency in Malaysian Islamic banks while fixed assets and operating revenue contribute the most to Indonesian Islamic banks’ inefficiency.

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Published

2023-08-31

Issue

Section

Articles

How to Cite

STABILITY OF ISLAMIC BANK EFFICIENCY IN INDONESIA AND MALAYSIA: HAS COVID-19 MADE ANY DIFFERENCE?. (2023). Journal of Islamic Monetary Economics and Finance, 9(3), 491-510. https://doi.org/10.21098/jimf.v9i3.1526