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Does globalisation have an impact on dual banking system productivity in selected Southeast Asian banking industry?

Ribed Vianneca W Jubilee (Labuan Faculty of International Finance, Universiti Malaysia Sabah–Kampus Antarabangsa Labuan, Labuan, Malaysia) (Putra Business School, Serdang, Malaysia)
Fakarudin Kamarudin (School of Business and Economics, University Putra Malaysia, Serdang, Malaysia)
Ahmed Razman Abdul Latiff (Putra Business School, Serdang, Malaysia)
Hafezali Iqbal Hussain (Taylor's Business School, Taylor's University, Subang Jaya, Malaysia) (University of Economics and Human Sciences, Warsaw, Poland)
Nazratul Aina Mohamad Anwar (Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, Nilai, Malaysia)

Asia-Pacific Journal of Business Administration

ISSN: 1757-4323

Article publication date: 16 November 2021

Issue publication date: 22 November 2022

380

Abstract

Purpose

Globalisation has influenced many countries, over the last few decades with financial globalisation and liberalisation bringing regulatory reforms in the banking sector. Thus, this study aims to fill a gap in the literature by examining the influence of globalisation on Islamic and conventional bank productivity in Southeast Asia.

Design/methodology/approach

The sample comprised 155 banks (23 Islamic and 132 conventional) from 4 countries from 2008 to 2017. Panel data techniques will be used, together with data envelopment analysis (DEA)-based Malmquist productivity index (MPI), to investigate the impact of chosen main determinants on bank productivity. A panel regression analysis will be performed after generating the productivity index from the DEA-based MPI frontier.

Findings

According to the findings, Islamic banks are statistically significantly more productive than conventional banks, and the findings of the t-test are corroborated by the findings of nonparametric tests. Furthermore, the findings of the panel regression model reveal that bank specific factors and macroeconomic variables are significant determinants to bank productivity. Surprisingly, the findings also show that the influence of social globalisation elements tends to be negatively related to conventional bank productivity.

Originality/value

This study adds to the existing literature by bridging the globalisation gap in the productivity of the dual banking industry, particularly in the specific context of Southeast Asia, given that the area is representative of Islamic and finance globally.

Keywords

Acknowledgements

The authors would like to thank the editors and the anonymous referees of the journal for constructive comments and suggestions, which have significantly helped to improve the contents of the paper. Furthermore, special thanks to Geran Penyelidikan Sekolah Perniagaan dan Ekonomi (GPSPE) 6303804-10601 sponsored by Sekolah Perniagaan dan Ekonomi, Universiti Putra Malaysia as an organization that funded our research. The usual caveats apply.

Citation

W Jubilee, R.V., Kamarudin, F., Abdul Latiff, A.R., Iqbal Hussain, H. and Mohamad Anwar, N.A. (2022), "Does globalisation have an impact on dual banking system productivity in selected Southeast Asian banking industry?", Asia-Pacific Journal of Business Administration, Vol. 14 No. 4, pp. 479-515. https://doi.org/10.1108/APJBA-09-2020-0343

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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