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Type :article
Subject :HG Finance
ISSN :2331-9712
Main Author :Mohd Faizal Basri
Additional Authors :Mohd Yahya Mohd Hussin
Title :Technical efficiency of development financial institutions in Malaysia
Place of Production :Tanjong Malim
Publisher :Fakulti Pengurusan dan Ekonomi
Year of Publication :2021
Corporate Name :Universiti Pendidikan Sultan Idris

Abstract : Universiti Pendidikan Sultan Idris
This study aims to identify the technical efficiency of Development Financial Institutions (DFIs) in Malaysia with the selected inputs of fixed asset and labour. Meanwhile, the output used in the study is financing. DFI is an institution that plays an important role in socio-economic development under the supervision of Bank Negara Malaysia (BNM). Using annual data from 2009 to 2018, technical efficiency is analysed using Data Envelopment Analysis (DEA) on the ten institutions selected in the DFIs. DEA results show that Sabah Development Bank Berhad (SDB) is the only institution considered as the most efficient. The rest of DFIs in the sample were deemed technical inefficient. The results also indicate that inefficient institutions including those with the lowest performance which are Credit Guarantee Corporation (CGC), Bank Pertanian Malaysia Berhad (Agrobank) and Bank Simpanan Nasional (BSN) have inefficient management in resource utilisation. Thus, activities in the operation of DFIs need to follow the law of return to scale for input and output orientation so that resources can be managed efficiently.

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