Foreign Bank Entry and Domestic Banks Profitability: The Role of Financial Freedom
Bank Asing dan Keuntungan Bank Tempatan: Fungsi Kebebasan Kewangan
Keywords:
Foreign Bank Entry, Domestic Banks, Financial Freedom, Bank ProfitabilityAbstract
This paper aims to determine the role of financial freedom in foreign bank entry and Malaysian domestic banks’ profitability relationships over the period of 2001–2020. Return on Asset (RoA) on Malaysian domestic bank datasets is used in measuring bank profitability over the year of 2001-2020 periods. The finding showed that financial freedom does not significantly influence the foreign bank entry and domestic bank profitability relationship and suggests the need for the authority to persistently review the regulation or deregulation of the commencing regulatory perseverance that determines financial freedom. Precisely, the findings demonstrate the importance of the authority’s constant re-evaluation of their degree of interference with the freedom of the domestic banking sector. Those are important features to be implemented by the authority in the process of ascertaining the significant positive impacts of financial freedom on foreign banks entry and domestic banks’ profitability relationships.
Kajian ini bertujuan untuk mengenal pasti fungsi kebebasan kewangan terhadap hubungan di antara bank asing dan keuntungan bank tempatan untuk tempuh tahun 2001–2020. Data Pulangan ke atas Aset bank-bank tempatan Malaysia digunakan untuk mengukur kadar keuntungan bank tempatan bagi tempuh kajian tersebut. Penemuan kajian ini menunjukan bahawa kebebasan kewangan tidak memberi kesan yang signifikan dalam memengaruhi hubungan di antara bank asing dan keuntungan bank tempatan. Kajian ini mencadangkan agar pihak berautoriti untuk melihat dan mengkaji semula secara berterusan dalam proses untuk meningkatkan atau menurunkan tahap kebebasan kewangan di sektor perbankan tempatan. Ianya merupakan usaha yang penting dalam memastikan bahawa kebebasan kewangan adalah memberi impak positif kepada hubungan di antara bank asing dan keuntungan bank tempatan di Malaysia.
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