The nexus between financial sector consolidation, competition and efficiency: empirical evidence from the Malaysian banking sector

By employing data on 337 bank-year observations, the paper examines the impact of consolidation on efficiency and competition in the Malaysian banking sector during 1996–2008. We employ the Panzar-Rosse (P-R) H-statistic method to evaluate the degree of competition, while Data Envelopment Analysis (...

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Main Author:	Sufian, Fadzlan
Format:	Article
Language:	English
Published:	Oxford University Press 2011
Subjects:	HG1501 Banking
Online Access:	http://irep.iium.edu.my/5195/ http://irep.iium.edu.my/5195/ http://irep.iium.edu.my/5195/ http://irep.iium.edu.my/5195/1/Sufian__%282011%29.pdf

id	iium-5195
recordtype	eprints
spelling	iium-51952013-06-28T02:42:54Z http://irep.iium.edu.my/5195/ The nexus between financial sector consolidation, competition and efficiency: empirical evidence from the Malaysian banking sector Sufian, Fadzlan HG1501 Banking By employing data on 337 bank-year observations, the paper examines the impact of consolidation on efficiency and competition in the Malaysian banking sector during 1996–2008. We employ the Panzar-Rosse (P-R) H-statistic method to evaluate the degree of competition, while Data Envelopment Analysis (DEA) is employed to compute the efficiency of individual banks. The empirical findings from the DEA suggest that the Malaysian banking sector has been relatively inefficient in their intermediation function during the post-merger period. On the other hand, we find that the Malaysian banking sector has been relatively more efficient during the post-merger period under the revenue approach. The test of market contestability by using the P-R method seems to reject both monopoly and perfect market competition conditions indicating monopolistic market behaviours among banks operating in the Malaysian banking sector. Oxford University Press 2011-07-12 Article PeerReviewed application/pdf en http://irep.iium.edu.my/5195/1/Sufian__%282011%29.pdf Sufian, Fadzlan (2011) The nexus between financial sector consolidation, competition and efficiency: empirical evidence from the Malaysian banking sector. IMA Journal of Management Mathematics, 22 (4). pp. 419-444. ISSN 1471-678X http://imaman.oxfordjournals.org/ DOI:10.1093/imaman/dpr015
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking
spellingShingle	HG1501 Banking Sufian, Fadzlan The nexus between financial sector consolidation, competition and efficiency: empirical evidence from the Malaysian banking sector
description	By employing data on 337 bank-year observations, the paper examines the impact of consolidation on efficiency and competition in the Malaysian banking sector during 1996–2008. We employ the Panzar-Rosse (P-R) H-statistic method to evaluate the degree of competition, while Data Envelopment Analysis (DEA) is employed to compute the efficiency of individual banks. The empirical findings from the DEA suggest that the Malaysian banking sector has been relatively inefficient in their intermediation function during the post-merger period. On the other hand, we find that the Malaysian banking sector has been relatively more efficient during the post-merger period under the revenue approach. The test of market contestability by using the P-R method seems to reject both monopoly and perfect market competition conditions indicating monopolistic market behaviours among banks operating in the Malaysian banking sector.
format	Article
author	Sufian, Fadzlan
author_facet	Sufian, Fadzlan
author_sort	Sufian, Fadzlan
title	The nexus between financial sector consolidation, competition and efficiency: empirical evidence from the Malaysian banking sector
title_short	The nexus between financial sector consolidation, competition and efficiency: empirical evidence from the Malaysian banking sector
title_full	The nexus between financial sector consolidation, competition and efficiency: empirical evidence from the Malaysian banking sector
title_fullStr	The nexus between financial sector consolidation, competition and efficiency: empirical evidence from the Malaysian banking sector
title_full_unstemmed	The nexus between financial sector consolidation, competition and efficiency: empirical evidence from the Malaysian banking sector
title_sort	nexus between financial sector consolidation, competition and efficiency: empirical evidence from the malaysian banking sector
publisher	Oxford University Press
publishDate	2011
url	http://irep.iium.edu.my/5195/ http://irep.iium.edu.my/5195/ http://irep.iium.edu.my/5195/ http://irep.iium.edu.my/5195/1/Sufian__%282011%29.pdf
first_indexed	2023-09-18T20:13:40Z
last_indexed	2023-09-18T20:13:40Z
_version_	1777407645130424320

The nexus between financial sector consolidation, competition and efficiency: empirical evidence from the Malaysian banking sector

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