Do Ownership Make a Different Performance?

(Evidence from Indonesian Banks)

Authors

  • Ika Permatasari
  • Idil Rakhmat Susanto

Abstract

Policy making in determining the direction and objectives of the banking system is certainly influenced by those who dominate ownership.Indonesia is one of the developing countries in Asia that has experienced an economic crisis since 20 years ago andsince 2000s the crisis period ended. This phenomenon is very interesting to be discussed further related to banking ownership. This study aims to examine the role of ownership structure on banking performance. Using MANOVA estimation of panel data for 100 banks in Indonesia, this study examined the effect of ownership structure (i.e. government ownership, domestic private ownership, and foreign ownership)on bank performance (i.e.profitability, credit quality, liquidity, and quality of earnings assets). The results indicate that government-owned banks have the best performance in terms of profitability. In terms of liquidity and earnings assets, foreign banks are better than government-owned or domestic private-owned banks. In terms of credit quality, all banks have the same performance.

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Published

2020-04-04

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Section

Articles