Abstract
Banking has undergone significant developments in terms of banking services and banking product innovation in order to adapt to rapid changes in market demands and trends. Nowadays, banks must focus not only on conventional but also nonconventional products and services that meet the complexity of communities' needs. This can become a challenge for banks, and often can affect high-risk strategies or decision-making. This study aims to examine the effect of ownership type of bank on the degree of bank risktaking behavior by using multiple regression analysis methods to analyze the data of commercial banks in Indonesia during the period 2007-2016. It also tests whether specific bank characteristics have an influence on risk-taking behavior. We classify banks based on their ownership type into government-owned banks, privately owned banks, and foreign banks. This research is expected to provide information on which types of bank ownership have greater risk-taking behavior compared to banks with other types of ownership. The model estimates that government-owned banks and foreign banks tend to take a higher degree of risk than privately owned banks. The results showed that bank liquidity factors and funding diversification significantly affect the risk-taking level, whereas the other characteristics of banks do not show any significant effects.
| Original language | English |
|---|---|
| Title of host publication | Business and Management Issues in the Global and Digital Era |
| Subtitle of host publication | Indonesian Perspectives |
| Publisher | Nova Science Publishers, Inc. |
| Pages | 49-62 |
| Number of pages | 14 |
| ISBN (Electronic) | 9781536165302 |
| ISBN (Print) | 9781536162752 |
| Publication status | Published - 11 Nov 2019 |
Keywords
- Bank risk-taking
- Bank-specific characteristics
- Ownership structure
- Z-score
