Value Creation in the Listed Banks: Do Governance Matter?

  • Abdul Mongid STIE Perbanas Surabaya
  • R. R Iramani STIE Perbanas Surabaya
  • Muazaroh Muazaroh STIE Perbanas Surabaya

Abstract

We assess the relationship between bank governance practice (GCG), efficiency, capital and risk on value creation in a sample of Indonesia commercial banks using the balance panel methodology. Our results suggest that GCG has a positive impact on value creation and performance. We also find that higher interest margin eventually becomes more profitable, better capitalized and that higher capital levels tend to have a neutral or negative effect on value creation. Efficiency levels are positive to value creation. These results are generally confirmed by a series of robustness tests. The findings convey potentially important implications for bank prudential supervision and underline the importance of attaining better governance to support sustainability and financial stability objectives.

Published
2020-07-21
How to Cite
Abdul Mongid, R. R Iramani, & Muazaroh Muazaroh. (2020). Value Creation in the Listed Banks: Do Governance Matter?. International Journal of Business and Society, 21(2), 917-930. https://doi.org/10.33736/ijbs.3302.2020