Publication: Impact of country’s governance dimensions on bank revenue efficiency: Overview on middle east, Southeast Asia, and South Asia countries
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Date
2020
Journal Title
Journal ISSN
Volume Title
Publisher
Vilnius University
Abstract
This study attempts to discover the impact of the limitation of a country’s governance on Islamic and conventional bank revenue efficiency by using data from the countries of three regions. Non-parametric Data Envelopment Analysis (DEA) employed to measure the bank revenue efficiency level. The applied method of estimation consists of pooled Ordinary Least Square (OLS), Fixed Effect Model (FEM), Random Effect Model (REM), and the Generalized Method of Moments (GMM) to examine the impact of country governance and other potential determinants on bank efficiency. This study finds out that the dimensions of voice and accountability positively influenced Islamic and conventional bank revenue efficiency, however, the political stability and absence of violence and control of corruption provided the negative relationship. Furthermore, other dimensions of regulatory quality, government effectiveness and rule of law significantly negative with the conventional bank revenue efficiency. Implications from the study allow the related parties to identify the significant dimensions of a country’s governance to the efficiency of the banks to ensure better bank performance.
Description
Transformations in Business and Economics
Volume 19, Issue 1, 2020, Pages 191-228
Keywords
country governance,, Islamic banks,, conventional banks,, revenue efficiency,, data envelopment analysis.