| dc.description.abstract | More than a decade after the severe economic crisis in 1997, Indonesia has undergone major
changes in the banking industry. The restructuring program is continuing up to the present to
strengthen and improve the performance of the banking system. This paper examines and
analyses the efficiency and productivity change in the Indonesian banking industry during the
restructuring period, encompassing the 12 years from 2000 to 2011. Employing nonparametric
data envelopment analysis (DEA) and a Malmquist productivity index (MPI), this
study provides measures of technical efficiency, efficiency change and technological change
using panel data from 108 commercial banks. The finding suggests that in general the
structural reforms have improved the average level of bank efficiency and productivity in
which efficiency change is the main source of productivity improvements rather than
technological change. It also reveals that the efficiency score under variable returns to scale is
higher than under constant return to scale. Furthermore, the improvement of scale efficiency
change indicates the positive effect of the structural reforms through mergers and
acquisitions. | |
