Productivity growth of zakat institutions in Malaysia: An application of data envelopment analysis
Abstract
Purpose
The purpose of this paper is to analyze the changes in productivity of zakat institutions in Malaysia from 2003 to 2007. The data consist of a panel of 14 State Islamic Religious Councils (SIRCs) in Malaysia. Efficiency is measured by the Malmquist Index, using a data envelopment analysis (DEA) technique.
Design/methodology/approach
This paper uses Malmquist Productivity Index, using a DEA technique. The Malmquist productivity measures are decomposed into two components: efficiency change and technical change index.
Findings
The results showed that total factor productivity (TFP) has increased slightly for the whole industry, which is mainly due to the technical change rather than the efficiency change. Further decomposition of the efficiency change into its pure technical and scale efficiency components suggest that the pure efficiency is found to be a more important source of efficiency change than scale efficiency component.
Originality/value
This paper investigates the productivity and efficiency of zakat institutions in Malaysia. It will be of value to provide evidence to the policy makers to improve the efficiency of the institutions.
Keywords
Citation
Wahab, N.A. and Rahim Abdul Rahman, A. (2012), "Productivity growth of zakat institutions in Malaysia: An application of data envelopment analysis", Studies in Economics and Finance, Vol. 29 No. 3, pp. 197-210. https://doi.org/10.1108/10867371211246876
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited