On the efficiency of the Malaysian banking Sector: a risk-return perspective

The purpose of this paper is to examine the efficiency of the Malaysian banking sector.The technique used by Oliveira and Tabak is extended by employing market data as input and output variables to individual bank stocks, which are listed on the Kuala Lumpur Stock Exchange (KLSE). By doing this, the...

Full description

Bibliographic Details
Main Authors:	Sufian, Fadzlan, Haron, Razali
Format:	Article
Language:	English
Published:	Emerald Group Publishing Limited 2009
Subjects:	HG1501 Banking
Online Access:	http://irep.iium.edu.my/10230/ http://irep.iium.edu.my/10230/ http://irep.iium.edu.my/10230/ http://irep.iium.edu.my/10230/2/On_the_Efficiency_of_the_Malaysian_Banking_Sector_A_Risk_Return_Perspective.pdf

id	iium-10230
recordtype	eprints
spelling	iium-102302012-01-31T04:34:30Z http://irep.iium.edu.my/10230/ On the efficiency of the Malaysian banking Sector: a risk-return perspective Sufian, Fadzlan Haron, Razali HG1501 Banking The purpose of this paper is to examine the efficiency of the Malaysian banking sector.The technique used by Oliveira and Tabak is extended by employing market data as input and output variables to individual bank stocks, which are listed on the Kuala Lumpur Stock Exchange (KLSE). By doing this, the paper aims to broaden the scope of the existing studies by employing individual bank market data to measure their efficiency levels. The paper utilizes the non-parametric data envelopment analysis methodology to measure the efficiency of banks which are listed on the KLSE. While previous bank efficiency studies have used balance sheet and income statements data, this paper uses individual bank’s market data as the input and output variables to construct the efficiency frontier. The main conclusion of this paper is that the most efficient bank is also highly ranked in terms of returns with relatively low standard deviation and beta. The results also suggest that all the banks which have managed to appear on the efficiency frontier are mainly based on the relatively higher mean returns rather than lower standard deviations and/or beta. Research limitations/implications – The approach used in this paper could also be used to other economic sectors, as well as from a multiple countries perspective as this approach allows the comparison of different countries, which have different accounting rules and are not comparable by using standard models. The approach could also be extended to incorporate other input(s) and/or output(s) which could further add to the robustness of the results. The contribution of the paper consists of proposing a new approach to the measurement of bank efficiency. Emerald Group Publishing Limited 2009 Article PeerReviewed application/pdf en http://irep.iium.edu.my/10230/2/On_the_Efficiency_of_the_Malaysian_Banking_Sector_A_Risk_Return_Perspective.pdf Sufian, Fadzlan and Haron, Razali (2009) On the efficiency of the Malaysian banking Sector: a risk-return perspective. International Journal of Commerce and Management, 19 (3). pp. 222-232. ISSN 1056-9219 http://www.emeraldinsight.com/journals.htm?issn=1056-9219&volume=19&issue=3 10.1108/10569210910987994
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking
spellingShingle	HG1501 Banking Sufian, Fadzlan Haron, Razali On the efficiency of the Malaysian banking Sector: a risk-return perspective
description	The purpose of this paper is to examine the efficiency of the Malaysian banking sector.The technique used by Oliveira and Tabak is extended by employing market data as input and output variables to individual bank stocks, which are listed on the Kuala Lumpur Stock Exchange (KLSE). By doing this, the paper aims to broaden the scope of the existing studies by employing individual bank market data to measure their efficiency levels. The paper utilizes the non-parametric data envelopment analysis methodology to measure the efficiency of banks which are listed on the KLSE. While previous bank efficiency studies have used balance sheet and income statements data, this paper uses individual bank’s market data as the input and output variables to construct the efficiency frontier. The main conclusion of this paper is that the most efficient bank is also highly ranked in terms of returns with relatively low standard deviation and beta. The results also suggest that all the banks which have managed to appear on the efficiency frontier are mainly based on the relatively higher mean returns rather than lower standard deviations and/or beta. Research limitations/implications – The approach used in this paper could also be used to other economic sectors, as well as from a multiple countries perspective as this approach allows the comparison of different countries, which have different accounting rules and are not comparable by using standard models. The approach could also be extended to incorporate other input(s) and/or output(s) which could further add to the robustness of the results. The contribution of the paper consists of proposing a new approach to the measurement of bank efficiency.
format	Article
author	Sufian, Fadzlan Haron, Razali
author_facet	Sufian, Fadzlan Haron, Razali
author_sort	Sufian, Fadzlan
title	On the efficiency of the Malaysian banking Sector: a risk-return perspective
title_short	On the efficiency of the Malaysian banking Sector: a risk-return perspective
title_full	On the efficiency of the Malaysian banking Sector: a risk-return perspective
title_fullStr	On the efficiency of the Malaysian banking Sector: a risk-return perspective
title_full_unstemmed	On the efficiency of the Malaysian banking Sector: a risk-return perspective
title_sort	on the efficiency of the malaysian banking sector: a risk-return perspective
publisher	Emerald Group Publishing Limited
publishDate	2009
url	http://irep.iium.edu.my/10230/ http://irep.iium.edu.my/10230/ http://irep.iium.edu.my/10230/ http://irep.iium.edu.my/10230/2/On_the_Efficiency_of_the_Malaysian_Banking_Sector_A_Risk_Return_Perspective.pdf
first_indexed	2023-09-18T20:19:39Z
last_indexed	2023-09-18T20:19:39Z
_version_	1777408020951597056

On the efficiency of the Malaysian banking Sector: a risk-return perspective

Similar Items