Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2020.1858921
Impact of Rule of Law and Government Size to the Microfinance Efficiency
Hafezali Iqbal Hussain
Sebastian Kot
orcid.org/0000-0002-8272-6918
Fakarudin Kamarudin
Lim Huang Yee
Sažetak
This study examines the impact of rule of law and government
size under the dimensions of economic freedom to the social and
financial efficiency of microfinance institutions (MFIs) from
Thailand, Philippines, Malaysia, Indonesia, and Cambodia 2011 to
2018. The Data Envelopment Analysis (DEA) approach has been
applied to identify the efficiency level of MFIs. At the same time,
the Pooled Ordinary Least Square (PoOLS) and Generalized Least
Square (GeLS) methods comprising the Fixed Effect (FEMod) and
Random Effect (REMod) models are used to examine the impact
of dimensions of economic freedom and potential determinants
on the efficiency level of MFIs. Overall, the results revealed that
the technical efficiencies for both social and financial efficiency
are contaminated by managerial inefficiency, which is measured
by pure technical efficiency. This indicates, although the MFIs had
been operating on a relatively optimal scale, they were facing the
inefficiency from the managerial side. Besides, the results from
the panel regression analysis have implied that both property
rights and government integrity under the measurement of rule
of law positively influence the MFIs’ financial efficiency.
Meanwhile, the impact of government size shows both tax burden and government spending are significantly positive to the
social efficiency of MFIs. As the policy implication, the information
provides suggestion to the government on how its role can help
in improving the efficiency level of MFIs and implements some
useful initiatives to help MFIs to sustain in the long term. In addition to that policymakers can identify the relevant inputs of MFIs
and thus revise the policy accordingly and design new policies
and regulations based on different economic freedom dimensions. The results of the present study provide a reference to
guide them in decision making on their investments. For academicians or researchers, they can obtain more information regarding the efficiency of MFIs that is valuable for further research
or study.
Ključne riječi
Microfinance institutions; economic freedom; rule of law; government size; social efficiency; financial efficiency
Hrčak ID:
301263
URI
Datum izdavanja:
31.12.2021.
Posjeta: 359 *