An analysis on the total factor productivity of selected commercial banks in the ASEAN-5 countries using Malmquist-DEA analysis from 2006-2020

• Main Authors: Chua, Kervin T., Mallari, Maria Jeanette C., Navales, Joacquin Carlo A., Yu, Chelsea Ann A.
• Format: text
• Language: English
• Published: Animo Repository 2022
• Subjects: Banks and banking—Southeast Asia; Industrial productivity—Southeast Asia; Banks and banking—Technological innovations—Southeast Asia; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etdb_finman/35; https://animorepository.dlsu.edu.ph/context/etdb_finman/article/1029/viewcontent/An_analysis_on_the_total_factor_2.pdf
• Institution: De La Salle University

The resilience of an economy is reliant on the health of its Financial Institutions, which is why lawmakers and economists are especially careful when such a sector is faced with crises. This paper examines the efficiency of banks from the countries Singapore, Malaysia, Philippines, Thailand, and Indonesia in terms of their Total Factor Productivity, Technological Change, and Technical Efficiency during the years 2006 to 2020, separated by four periods; pre-GFC, during GFC, post-GFC or pre-COVID, and during COVID. The study uses interest expense, interest income, non-interest expense, non-interest income, personnel expense and deposits as variables. These were then processed through the Malmquist Productivity Index via the Data Envelopment Analysis (DEA). The change test was also utilized to examine which input and/or output variables were most impactful on the scores garnered by the selected banks for the various efficiency types. The paper found that only half of the nineteen banks had performed efficiently on average during the four periods, with Singapore having the most efficient banks and the Philippines with the least. Moreover, it was found that interest expense and interest income were seen to be the most common focal points of impact on the efficiency achievement of banks during the financial crises. This paper answers which banks and countries among the ASEAN-5 had performed inefficiently during the aforementioned four periods matched with the assessment of their few countermeasures to mitigate the collapse of their financial sector.