The impact of financial integration on banking system efficiency in ASEAN countries

Financial integration is a situation in which financial markets of countries around the world are closely linked together through the process of banking deregulation, capital account liberalization and financial openness. In theory, the liberalized financial system would stimulate higher competition...

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Main Author:	Hamizah, Mahmud
Format:	Thesis
Language:	eng eng
Published:	2017
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/6956/1/s812345_01.pdf https://etd.uum.edu.my/6956/2/s812345_02.pdf
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id	my-uum-etd.6956
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Sabki, Sharmilawati
topic	HG Finance
spellingShingle	HG Finance Hamizah, Mahmud The impact of financial integration on banking system efficiency in ASEAN countries
description	Financial integration is a situation in which financial markets of countries around the world are closely linked together through the process of banking deregulation, capital account liberalization and financial openness. In theory, the liberalized financial system would stimulate higher competition, increase the flows of funds into the domestic banking system and improve the efficiency of the financial intermediation process. The objective of the study is to determine the impact of financial integration on the banking system efficiency for five major economies in ASEAN countries. This study employs the unbalanced panel data for five selected ASEAN countries, which are Malaysia, Indonesia, Philippines, Singapore and Thailand between the periods of 2004 to 2014. The dependent variables for this study is banking system efficiency which is represented by the bank net interest margin to total earning assets ratio, the main independent variable is the financial integration and the control variables are inflation, economic growth rate, income group and real interest rate. The study discovers the positive relationship between financial integration and banking system efficiency for five ASEAN countries. In addition, the study also finds the positive link between inflation and banking system efficiency while the higher and middle income countries have a better efficiency performance as compared to the lower and middle income group. In contrary, the economic growth rate is found to have a negative relationship with the banking system efficiency. In addition, the result argues that the real interest rate is not one of the factors that determine the banking sector efficiency. For the robustness model, the bank overhead costs to total assets ratio (operational cost) is employed as the dependent variables to measure the banking system efficiency. Despite of using the bank overhead costs to total assets ratio as the dependent variable, the findings support the earlier conclusion that the financial integration, inflation and income group enhance the banking sector efficiency. Therefore, these findings would assist the policy makers in assessing the effectiveness of the current regulations on the financial integration.
format	Thesis
qualification_name	other
qualification_level	Master's degree
author	Hamizah, Mahmud
author_facet	Hamizah, Mahmud
author_sort	Hamizah, Mahmud
title	The impact of financial integration on banking system efficiency in ASEAN countries
title_short	The impact of financial integration on banking system efficiency in ASEAN countries
title_full	The impact of financial integration on banking system efficiency in ASEAN countries
title_fullStr	The impact of financial integration on banking system efficiency in ASEAN countries
title_full_unstemmed	The impact of financial integration on banking system efficiency in ASEAN countries
title_sort	impact of financial integration on banking system efficiency in asean countries
granting_institution	Universiti Utara Malaysia
granting_department	School of Economics, Finance & Banking
publishDate	2017
url	https://etd.uum.edu.my/6956/1/s812345_01.pdf https://etd.uum.edu.my/6956/2/s812345_02.pdf
_version_	1747828135890518016
spelling	my-uum-etd.69562021-05-09T03:08:44Z The impact of financial integration on banking system efficiency in ASEAN countries 2017 Hamizah, Mahmud Sabki, Sharmilawati School of Economics, Finance & Banking School of Economics, Finance and Banking HG Finance Financial integration is a situation in which financial markets of countries around the world are closely linked together through the process of banking deregulation, capital account liberalization and financial openness. In theory, the liberalized financial system would stimulate higher competition, increase the flows of funds into the domestic banking system and improve the efficiency of the financial intermediation process. The objective of the study is to determine the impact of financial integration on the banking system efficiency for five major economies in ASEAN countries. This study employs the unbalanced panel data for five selected ASEAN countries, which are Malaysia, Indonesia, Philippines, Singapore and Thailand between the periods of 2004 to 2014. The dependent variables for this study is banking system efficiency which is represented by the bank net interest margin to total earning assets ratio, the main independent variable is the financial integration and the control variables are inflation, economic growth rate, income group and real interest rate. The study discovers the positive relationship between financial integration and banking system efficiency for five ASEAN countries. In addition, the study also finds the positive link between inflation and banking system efficiency while the higher and middle income countries have a better efficiency performance as compared to the lower and middle income group. In contrary, the economic growth rate is found to have a negative relationship with the banking system efficiency. In addition, the result argues that the real interest rate is not one of the factors that determine the banking sector efficiency. For the robustness model, the bank overhead costs to total assets ratio (operational cost) is employed as the dependent variables to measure the banking system efficiency. Despite of using the bank overhead costs to total assets ratio as the dependent variable, the findings support the earlier conclusion that the financial integration, inflation and income group enhance the banking sector efficiency. Therefore, these findings would assist the policy makers in assessing the effectiveness of the current regulations on the financial integration. 2017 Thesis https://etd.uum.edu.my/6956/ https://etd.uum.edu.my/6956/1/s812345_01.pdf text eng public https://etd.uum.edu.my/6956/2/s812345_02.pdf text eng public other masters Universiti Utara Malaysia Abaoub, E., Nouail, M. A.I. & Ochi, A. (2015). 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The impact of financial integration on banking system efficiency in ASEAN countries

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