Do Foreign Firms Bring Value to Emerging Financial Market? (An Empirical Evidence Indonesia Banking)
- DOI
- 10.2991/aebmr.k.200812.010How to use a DOI?
- Keywords
- banking, financial ratio, foreign ownership, profitability
- Abstract
The research aims to study the value created by the foreign shareholders in the Indonesia banking industry from 2016-2018. The research analyzed the performance of foreign-owned banks versus domestic owned banks. The banking industry is one of main drivers of the main drivers of economic growth. The study focused on the 19 banks that are categorized as bank books 3 and 4 asper the central bank regulation. The shareholders’ status will be the independent variable, and the key financial ratios will be dependent variables. The financial ratios are capital structure, credit risk firm size, and profitability ratio. We use non-parametric (Mann Whitney) and parametric (Dummy Variable Regression). The empirical results show that there are differences in profitability and firm size. The profitability was shown in return on assets, return on equity, economic value-added. The firm size was shown in total assets and equity. The local banks performed better than foreign banks in return on assets, return on equity, economic value-added, and net interest margin. However, foreign banks only performed better than local banks in equity size. There was no significant difference in capital structure and credit risk. The results are significant at a= 1% for return on asset, economic value-added, and equity size.
- Copyright
- © 2020, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Suwinto Johan PY - 2020 DA - 2020/08/13 TI - Do Foreign Firms Bring Value to Emerging Financial Market? (An Empirical Evidence Indonesia Banking) BT - Proceedings of the 3rd Asia Pacific Management Research Conference (APMRC 2019) PB - Atlantis Press SP - 51 EP - 56 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.200812.010 DO - 10.2991/aebmr.k.200812.010 ID - Johan2020 ER -