Value Creation in the Listed Banks: Do Governance Matter?

Authors

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

DOI:

https://doi.org/10.33736/ijbs.3302.2020

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.

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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