Ownership Structure, Bank Performance, and Risk : Some Indonesian Evidence

TAMARA, YOHANA (2017) Ownership Structure, Bank Performance, and Risk : Some Indonesian Evidence. Masters thesis, Universitas Sebelas Maret.

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    Abstract

    This study aims to empirically re-examine the performance and risk taking differences of Indonesian banks across ownership structure. The ownership structures of Indonesian banks are disentangled into five main categories, such as: State-owned banks, regional development banks, foreign and joint venture banks, domestic banks owned by foreign institutions, and domestic banks owned by local institutions. Bank performance is measured by Return on Assets (ROA) and Return on Equity (ROE). While the risk-taking of banks is measured by the value of Z-Score, proposed by Boyd and Graham (1986). The analysis in this study is also considering the characteristics of the bank as a control variable, includes: bank size, bank leverage, and loan to deposit ratio (LDR). The observation in this study involved 110 commercial banks in Indonesia over the period of 2005 to 2013 in monthly dataset. The method of analysis in this study is using Panel Least Square method. Several results can be concluded from the data analysis: First, state-ownership negatively affects banks profitability as measured by Return on Equity and negatively affects bank risk taking measured by Z-Score ROA. Second, regional government ownership positively affects banks profitability, both ROE and ROA; and negatively affects bank risk taking measured by Z-Score ROA. Foreign banks and joint venture banks, positively affect banks profitability, both Return on Equity (ROE) and Return on Asset (ROA) and also positively affects bank risk-taking as measured by Z-Score ROE. Robustness test have also been performed in this study which concluded that foreign ownership as a whole are better than government ownership as a whole in terms of performance and risk taking.

    Item Type: Thesis (Masters)
    Subjects: H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
    H Social Sciences > HG Finance
    Divisions: Pasca Sarjana > Magister
    Pasca Sarjana > Magister > Magister Manajemen
    Depositing User: faizah sarah yasarah
    Date Deposited: 07 Jun 2017 21:51
    Last Modified: 07 Jun 2017 21:51
    URI: https://eprints.uns.ac.id/id/eprint/33985

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