Islamic banking Act in Indonesia requires to manage the financial funds and social funds simultaneously. In the case of spin-off Islamic Banks, the fund manager is separate from the parent company, including in managing social funds, e.g. zakah, infaq, and sadaqah. This study is going to investigate the spin-off's impact on the social funds' productivity in spin-off Islamic Banks. The method used in this paper is the Malmquist Productivity Index (MPI) test for annual data from the period 2005 to 2017. The samples used is two spin-off Islamic banks as the rest are established with conversion or acquisition models. The results show that productivity changes increased after the spin-off decision and was influenced by technological changes. However, the spin-off decision hasn't a significant impact on social funds' productivity in Islamic banks. It implies that independence in managing resources supports the Islamic banks' performance, especially for social funds.
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