Dede Djuniardi, Lecturer of the Faculty of Economics, Universitas Kuningan, earned a doctorate from the Faculty of Economics and Business (FEB) UGM. He obtained the academic degree after defending his dissertation entitled Efficiency, Competition, Price Behavior, and Information Technology in Banking in ASEAN during an open doctoral exam virtually on Tuesday (29/12).
Dede said the ASEAN region is dynamic, and it would be interesting to investigate the relationship between competition and financial stability. It is because this area has experienced liberalization through the penetration of foreign banks in the early 1990s. Then, followed by deregulation, regional economic integration, and extraordinary consolidation in the late 1990s as a bank restructuring strategy after the 1997-1998 Asian financial crisis.
Furthermore, Dede said that in several previous studies, it is known that efficiency, competition, and bank price behavior have an interdependence relationship pattern on each variable. Therefore, he conducted further research to test the interdependence of these three variables using a sample of banks in six ASEAN countries. In addition, the impact of information technology on the three variables is also studied.
“The test results show that there is a positive interdependence between efficiency and competition,” he explained.
This condition can be seen from the low BOPO score. High efficiency will make the bank have a low Lerner index score which means the bank is competitive.
Other findings show the interdependence of competition with price behavior. Next, there is no interdependence between efficiency and price behavior. Meanwhile, information technology affects the efficiency, competition, and price behavior of banks.
Furthermore, Dede explained that the implications of this research for regulators are that competition is beneficial to encourage banks to be more efficient and vice versa. The reason is, this can enable banks to provide the best service for customers at a relatively cheaper cost so that economic costs will be more optimal. Implementing the Asean Banking Integration Framework (ABIF) must be a focus for the authorities because it increases competition, which impacts banking efficiency.
“However, there need to be regulations that limit competition between banks because competition can have an impact on the economy as a whole,” he said.
Source: https://ugm.ac.id/id/berita/20564-raih-doktor-usai-teliti-sektor-perbankan-di-asean
