The Effect of Liquidity Creation on Bank Capital: A Case Study in Indonesia

• 발행기관: 한국유통과학회
• 저자명: Ahmad FUAD Disman DISMAN Nugraha NUGRAHA Mayasari MAYASARI Ahmad FUAD
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.5, 649~656쪽, 전체 8쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.05.30

영문 초록

This paper aims to examine the moderating role of bank competition on the effect of liquidity creation on bank capital. We measure bank competition using the Lerner index approach, liquidity creation using the Catfat approach, and bank capital using the capital to total asset ratio approach. This test also considers control variables from bank-specific factors such as Return on Assets, Loan to Deposit Ratio, and Non-Performance Loans as well as macroeconomic factors such as Gross Domestic Product, inflation, and Bank Indonesia interest rates. The sampling technique used was purposive sampling. The data sample obtained was 96 banks from a population of 114 banks in Indonesia which consistently operated during the period 2008–2018. Hypothesis testing uses panel data regression analysis techniques through the first model of the Hayes method. The results show that the negative effect of liquidity creation on bank capital depends on competition. We found that bank competition at any level (low, medium, high) negatively moderates (weakens) the effect of liquidity creation on bank capital in all banks. This finding is consistent with the view that banks may strengthen their capital in response to bank competition which may decrease the level of bank liquidity creation.

목차

1. Introduction

2. Literature Review

3. Research Method

4. Results and Discussion

5. Conclusion

키워드

Moderation Bank Competition Liquidity Creation Bank Capital