Macroeconomic effect and risk-taking behavior in a dual banking system | Zendy

Faaza Fakhrunnas | Zendy; Wulan Dari | Zendy; Mustika Noor Mifrahi | Zendy

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Macroeconomic effect and risk-taking behavior in a dual banking system

Author(s) -

Faaza Fakhrunnas,

Wulan Dari,

Mustika Noor Mifrahi

Publication year - 2018

Publication title -

economic journal of emerging markets

Language(s) - English

Resource type - Journals

eISSN - 2502-180X

pISSN - 2086-3128

DOI - 10.20885/ejem.vol10.iss2.art5

Subject(s) - economics , cointegration , monetary economics , equity (law) , asset (computer security) , dual (grammatical number) , panel data , econometrics , art , computer security , literature , political science , computer science , law

This study aims to analyze the relationship between macroeconomic factors and risk-taking behavior in a dual banking system. Adopting a panel cointegration approach, this research posits macroeconomic factors as exogenous variables and risk-taking behavior as endogenous variables. With having 468 quarterly-observations consisting of 18 banks in Indonesia during 2010-Q4 to 2017-Q1, it finds that the risk-taking behavior of the banks has a long-term relationship with macroeconomic factors. Moreover, conventional bank has long-term relationship to macroeconomic nonetheless it results inversely to Islamic bank. In terms of bank-specified characteristics, bank size and equity to asset ratio are substantial factors for the banksâ€™ risk mitigation.

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