Universal Journal of Accounting and Finance Vol. 9(5), pp. 1125 - 1133
DOI: 10.13189/ujaf.2021.090522
Reprint (PDF) (440Kb)

Technical Efficiency of Development Financial Institutions in Malaysia

Nazri Hashim , Mohd Faizal Basri ^*, Mohd Yahya Mohd Hussin
Faculty of Management and Economics, Universiti Pendidikan Sultan Idris, Tanjong Malim, Malaysia

ABSTRACT

This study aims to identify the technical efficiency of Development Financial Institutions (DFIs) in Malaysia with the selected inputs of fixed asset and labour. Meanwhile, the output used in the study is financing. DFI is an institution that plays an important role in socio-economic development under the supervision of Bank Negara Malaysia (BNM). Using annual data from 2009 to 2018, technical efficiency is analysed using Data Envelopment Analysis (DEA) on the ten institutions selected in the DFIs. DEA results show that Sabah Development Bank Berhad (SDB) is the only institution considered as the most efficient. The rest of DFIs in the sample were deemed technical inefficient. The results also indicate that inefficient institutions including those with the lowest performance which are Credit Guarantee Corporation (CGC), Bank Pertanian Malaysia Berhad (Agrobank) and Bank Simpanan Nasional (BSN) have inefficient management in resource utilisation. Thus, activities in the operation of DFIs need to follow the law of return to scale for input and output orientation so that resources can be managed efficiently.

KEYWORDS
Technical Efficiency, Development Financial Institution, Data Envelopment Analysis, DFIs, DEA, Malaysia

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Nazri Hashim , Mohd Faizal Basri , Mohd Yahya Mohd Hussin , "Technical Efficiency of Development Financial Institutions in Malaysia," Universal Journal of Accounting and Finance, Vol. 9, No. 5, pp. 1125 - 1133, 2021. DOI: 10.13189/ujaf.2021.090522.

(b). APA Format:
Nazri Hashim , Mohd Faizal Basri , Mohd Yahya Mohd Hussin (2021). Technical Efficiency of Development Financial Institutions in Malaysia. Universal Journal of Accounting and Finance, 9(5), 1125 - 1133. DOI: 10.13189/ujaf.2021.090522.