The Efficiency of Indonesian Commercial Banks: Does the Banking Industry Competition Matter?

This study examines the effect of banking industry competition on efficiency commercial banks in Indonesia from 2010 to 2019. First, using data envelopment analysis (DEA), results showed that are moderately efficient. Second, this uses H-statistics, obtained through Panzar–Rosse model, measure level competition. The is a monopolistic market. In addition, also analysed other factors affecting bank efficiency, namely non-performing loans (NPL), loan deposit ratio (LDR), capital adequacy (CAR), size, and economic growth. used Tobit estimation method analyse variables. tighter reduces banks’ efficiency. support competition-inefficiency hypothesis. Other variables such as CAR, LDR, growth had significant Meanwhile, NPL variable size no effect.