Int. J. Economics and Business Research, Vol. 16, No. 3, 2018 355
Copyright © 2018 Inderscience Enterprises Ltd.
Technical efficiencies of Indonesian regional and
non-regional banks pre- and post-financial crisis
Nury Effendi, Maman Setiawan* and
Rina Indiastuti
Department of Economics,
Faculty of Economics and Business,
University of Padjadjaran,
Jl. Dipati Ukur No. 35, Bandung 40132,
Jawa Barat, Indonesia
Email: nury.effendi@unpad.ac.id
Email: maman.setiawan@unpad.ac.id
Email: rina.indiastuti@unpad.ac.id
*Corresponding author
Abstract: This research investigates technical efficiencies of Indonesian banks
operating regionally and nationally pre- and post-financial crisis in 2008. The
data envelopment analysis (DEA) with bootstrapping approach is applied to
estimate the technical efficiency. This study uses 119 banks listed in the
Indonesian Central Bank of Indonesia and Financial Service Authority (OJK)
with period from 2005 to 2014. Following the role of the banks, the technical
efficiency is estimated using an intermediation approach. The results show that
the banks are technically inefficient, on average. Overall, the average technical
efficiency of the regional banks is lower than the non-regional banks. Also,
there are significant differences of the technical efficiencies of the regional,
non-regional and all banks between pre and post-financial crisis. Further, the
differences of the technical efficiencies between regional and non-regional
banks are significant only in all periods and post-financial crisis. In addition,
the regional banks operating in the Java islands have higher average technical
efficiency compared to the regional banks operating outside the Java island,
although the difference is only significant in the period before the financial
crisis.
Keywords: technical efficiency; bootstraping approach; regional banks;
non-regional banks; pre- and post-financial crisis.
Reference to this paper should be made as follows: Effendi, N., Setiawan, M.
and Indiastuti, R. (2018) ‘Technical efficiencies of Indonesian regional and
non-regional banks pre- and post-financial crisis’, Int. J. Economics and
Business Research, Vol. 16, No. 3, pp.355–366.
Biographical notes: Nury Effendi is a Lecturer and Researcher at the
Economics Department, Faculty of Economics and Business, University of
Padjadjaran, Indonesia. He is also a Senior Researcher at the Center for
Economics and Development Studies (CEDS) at the same university. He
received his PhD from the Oklahoma University, USA. His research interests
focus on finance, macro-microeconomics links, SMEs’ performances, and
econometrics.