Pandi Pandi
Faculty of Economics and Management Institut Pertanian Bogor

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TECHNICAL EFFICIENCY AND COMPETITION LEVEL OF INDONESIA BANKING IN MICROFINANCE MARKET Pandi Pandi; Budi Purwanto; Abdul kohar Irwanto
Jurnal Aplikasi Manajemen Vol 16, No 3 (2018)
Publisher : Jurusan Manajemen Fakultas Ekonomi dan Bisnis Universitas Brawijaya

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (259 KB) | DOI: 10.21776/ub.jam.2018.016.03.12

Abstract

The purpose of this study are to find the relationship between SME credit competitions with the technical efficiency of banking. It involves banking statistics data from commercial banks and rural banks. Panzar-Rosse model was applied to measure a level of competition while the efficiency was determined using Data Envelopment Analysis (DEA). Data panel regression was utilized to analyze the Panzar-Rosse model coefficient while the efficiency score was obtained by using linear programming. The relevance of competition and efficiency was explored using the Granger causality test. Research result shows competition among BPRs inside a perfect competition market has an impact on their technical efficiency. A better competition between BPRs in a perfect competition market impact to lower technical efficiency. BPR competition with commercial banks occurred in a monopolistic market. In the monopolistic market, better technical efficiency would lower the competition. Technical efficiency score when commercial banks entered the competition revealed a climb score.