Title: Antecedents of banks' productivity growth in a developing economy: efficiency change or technological progress?

Authors: Fadzlan Sufian

Addresses: Khazanah Research and Investment Strategy, Khazanah Nasional Berhad, Level 33, Tower 2, Petronas Twin Towers, Kuala Lumpur City Centre, Kuala Lumpur 50088, Malaysia

Abstract: This paper attempts to empirically analyse the Malaysian banking sector|s productivity during the period 1995-2004. The empirical findings suggest that the Malaysian banking sector has exhibited productivity regress during the period under study mainly due to technological regress, rather than efficiency decline. The results suggest that the domestic banks| productivity were almost stagnant, while the foreign banks have exhibited productivity decline. The relationship between different bank size and productivity indicates that the majority of Malaysian banks which experienced productivity growth were the medium and large banks group, while the majority of banks that experienced productivity regress belonged to the small banks group.

Keywords: banks; productivity growth; Malmquist productivity index; Malaysia; developing economies; banking productivity; efficiency; technological progress; bank size.

DOI: 10.1504/IJBAAF.2010.031576

International Journal of Banking, Accounting and Finance, 2010 Vol.2 No.1, pp.80 - 110

Published online: 11 Feb 2010 *

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