28
Review of Islamic Economics, Vol. 8, No. 2, 2004
and it is calculated without the need for benchmark, whereas efficiency is based
on relativity and can only be calculated with respect to a reference point”
(Stavarek, 2003, emphasis added). Again, cost or output approach to efficiency
measurement implies profit criterion. For example, Table 2 in Fat and FIua
(1998) provides both the Х-efficiency and profit efficiency scores for each of the
six Singaporean banks from 1992-1996. Using the information as panel data we
find that PE is an increasing function at a decreasing rate of CE with adjusted
R2 = 0.82, with relevant coefficients significant at 5%.
25. For details on the point see Hasan (2003).
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