COMPARATIVE ANALYSIS OF INDONESIAN BANKING EFFICIENCY BY BANKS CATEGORY

Abstract

This study aims to compare the Indonesian banking efficiency among the six bank category: state-private,  merger-nonmerger,  and  domestic-foreign.  It  used  a  quantitative  approach  and historical data, where the data  used is both time series (2000–2012), and cross sectional (for some commercial banks that meet the  requirements  of the sample). Conceptually, it will rely upon  the  concept  of efficiency proposed by Farrell  (1957). Meanwhile,  banking efficiency measurement techniques used is the DEA with intermediation approach.  In the application of DEA, it uses both CRS models (CCR) and VRS (BCC). While in its construction, it uses input- oriented  approach.  In  comparing  those  banks,  we  aplly the  Wilcoxon-Mann-Whitney  Test. Based on the sample of 17 commercial banks, we find that, generally, Indonesian foreign banks are more efficient than  domestic. This fact also illustrates that the private banks are more efficient than state, and merger banks are more efficient than non-merger.

  Keywords: efficiency, banking, data envelopment analysis (DEA), post Asian monetary crisis