Authors: Noraya Soewarno; Hamdi Ali
Addresses: Maastricht School of Management, Endepolsdomein 150, 6229 EP Maastricht, Netherlands ' Maastricht School of Management, Endepolsdomein 150, 6229 EP Maastricht, Netherlands
Abstract: The banking sector is one of the most regulated industries and the impact of regulation and supervision on banks' performance are mixed, some positive and others negative. Hence, empirical studies become all the more important to assist banking authorities in their regulatory and supervisory roles to produce informed policy decisions. We examine the impact of bank regulation and supervision on bank scale efficiency over the period 2002-2011. Scale efficiency allows banks to operate at optimum scale, allowing banks to optimise performance. The overall results of our study showed that there is significant impact of bank regulation and supervision on scale efficiency. As far as we know, this study is unprecedented in the Indonesian context.
Keywords: bank regulation; bank supervision; bank efficiency; scale efficiency; panel data; Indonesia; banking industry.
International Journal of Economic Policy in Emerging Economies, 2016 Vol.9 No.4, pp.404 - 424
Received: 20 Jun 2014
Accepted: 14 Jul 2015
Published online: 06 Jan 2017 *