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Determinants of Sino-ASEAN Banking Efficiency: How Do Countries Differ?

1
Ungku Aziz Centre for Development Studies, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia
2
Putra Business School, University Putra Malaysia (UPM), 43400 Serdang, Selangor, Malaysia
3
Institute of Business Administration, University of Sindh, Jamshoro 76080, Pakistan
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Department of Finance and Banking, Faculty of Business and Accountancy, University of Malaya, 50603 Kuala Lumpur, Malaysia
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Department of Business Administration, Faculty of Business Studies, International Islamic University Chittagong, 4318 Kumira, Bangladesh
6
Department of Development Studies, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia
*
Author to whom correspondence should be addressed.
Economies 2019, 7(1), 13; https://doi.org/10.3390/economies7010013
Received: 12 September 2018 / Revised: 26 January 2019 / Accepted: 30 January 2019 / Published: 20 February 2019
(This article belongs to the Special Issue Computational Macroeconomics)
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PDF [692 KB, uploaded 20 February 2019]
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Abstract

The purpose of this paper is to assess the importance of geographical location in the banking sector efficiency of the Sino-ASEAN (Association of Southeast Asian Nations) region, and how the location was affected before, during and after the financial crisis. Using a panel of data from 407 banks from China, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam from 2000–2013, this study applies data envelopment analysis, Tobit regression, bootstrapping, and Simar and Wilson double bootstrapping regression. The empirical evidence suggests that the banking market has an important and significant role in the efficiency of the banking sector in the Sino-ASEAN region. The significant country’s coefficients suggest that during the pre-crisis period, banks belonging to China and Indonesia were more likely to be efficient due to the geographical location effect. The study finds the same tendency among Chinese banks in the crisis period as in the period before the crisis. Overall, the results suggest that Chinese banks outperform banks from the ASEAN countries in terms of efficiency. This study raises some significant policy implications for improving bank efficiency. View Full-Text
Keywords: Efficiency; DEA; China; ASEAN; banking; financial crisis; geographical location Efficiency; DEA; China; ASEAN; banking; financial crisis; geographical location
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Banna, H.; Shah, S.K.B.; Noman, A.H.M.; Ahmad, R.; Masud, M.M. Determinants of Sino-ASEAN Banking Efficiency: How Do Countries Differ? Economies 2019, 7, 13.

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