Rosita Suhaimi

Bank Service Quality (BSQ) Index

Purpose – This study aims to design and validate a new measuring instrument of service quality, and ultimately to establish a national service quality index for the banking sector. The primary contribution is the insight offered regarding what factors affect service quality and the BSQ Index, a national indicator reflecting the level of service quality within the banking sector.Design/methodology/approach – A total of 3380 questionnaires were distributed to the customers of 21 commercial and Islamic banks, of which only 1,519 were deemed usable, yielding a response rate of 44.9 per cent. The proposed 29‐item instrument has been empirically tested for unidimensionality, reliability and validity using both exploratory and confirmatory factor analysis.Findings – A factorial analysis suggests that service quality has three dimensions namely “Systemization”, “Reliable Communication” and “Responsiveness”, and subsequent multiple regression analysis revealed that “Systemization” is the most important service qua...

Factors affecting profit efficiency of commercial banks in Malaysia

This paper attempts to identify some factors that affect the profit efficiency of commercial banks in Malaysia. The profit efficiency of commercial banks in Malaysia, the dependent variable, was estimated using the Stochastic Frontier Approach (SFA) on a sample of unbalanced panel data, covering 23 commercial banks, between 1995 to 2007. Based on the empirical results, ICT was not found to exert a significant impact on profit efficiency, whereas competitiveness, non ICT stock expenditure and ownership were significant contributors. On the other hand, the size of banks was found to have significantly reduced profit efficiency, opening up for various interpretations of the interrelated role of ICT and competition.

Can Ownership Concentration and Structure be Linked to Productive Efficiency?: Evidence from Government Linked Companies in Malaysia☆

Abstract This paper examines the ownership concentration and structure, and analyzes its impact on firm productive efficiency. A stochastic frontier model with inefficiency effects is fitted to an unbalanced panel dataset of 31 government-linked companies (GLCs) listed at Malaysias Stock Exchange (Bursa Malaysia) over a period of 12 years (2001-2012). The results of the analysis reveal the governments shareholdings have significantly improve productive efficiency over time, although the link is weak. The insignificant positive link between ownership concentration and inefficiency, and between board ownership and inefficiency, imply high ownership concentration and board ownership are not effective corporate governance mechanism in improving efficiency. Although there is a strong evidence to show government ownership is positively related to productive efficiency, having high ownership concentration tend to influence inefficiency, concurring earlier studies that highly concentrated shareholding with complex pyramidal and cross-holdings ownership can signal underlying performance vulnerability in the long run. The study also observes that gradual but slow improvement in the GLCs efficiency levels, and that output generation has been labour-using and capital-saving over time.

Demographic factors and repayment performance of NBFI customers in Kuching

The main objective of this paper is to investigate whether demographic factors affect repayment performance of the non-bank financial institution customers in Kuching, Sarawak. Data required for analysis are collected using structured questionnaire from the existing housing loan, personal loan and business loan customers of non-bank financial institutions in Kuching. Findings showed that 55% of the respondents did not pay on time. Meanwhile, 62% of the respondents are male while 38% are female. Majority of the respondents (67%) fall in the age group of 30–39. In terms of education, 70% of the respondents possess a diploma or a degree. Furthermore, 62% of the sample is either working for private companies or self-employed while 38% are government servants. Results of the logistic regression analysis showed that among all the demographic factors tested, only distance has a predictive power over repayment performance. Each one unit increase in distance increased the odds of a respondent not paying his or her loan by 0.867.

EFFICIENCY CONVERGENCE TOWARDS INTERNATIONAL STANDARD: EVIDENCE FROM MALAYSIAN LISTED GOVERNMENT- LINKED COMPANIES (GLCs)

This paper investigates the efficiency convergence of Malaysian listed government-linked companies towards the benchmarked foreign owned firms that represent international standard. We use stochastic frontier analysis to estimate production efficiencies of 31 GLCs and 15 FFs over a period of 12 years (2001–2012). The results of the σ convergence test show a process of convergence although the speed is relatively slow. The study also observes a significant negative link between output generation and labour input, suggesting overcapacity in human capital investment, and a significant positive link between financial firms and inefficiency implying the need to enhance productivity driven personnel and knowledge based investments for firms in this sector.

Profit efficiency, intellectual human capital and ICT of commercial banks in Malaysia

This paper attempts to identify the significance of Information and Communications Technology (ICT) and intellectual human capital to the profit efficiency of commercial banks in Malaysia. The profit efficiency of commercial banks in Malaysia was estimated using the Stochastic Frontier Approach (SFA) on a sample of unbalanced panel data, covering 23 commercial banks, between 1995 to 2009. Based on the empirical results, both ICT and non ICT stock expenditure were found to exert significant positive impact on profit inefficiency, whereas intellectual human capital, size and ownership were negatively significant contributors.