Performance and Contribution of Japanese and Non-Japanese Financial Institutions in Developing Economies: an Empirical Research in Indonesia

Suwinto Johan

Abstract

Paper purpose is to analysis the value generated by the Japanese and Non Japanese financial institutions in Indonesia banking from 2013-2018. The paper concentrated on the 16 foreign banks contained of seven affiliates of Japanese banks and nine affiliates of Asian Non-Japanese Banks. The shareholders’ origination will be the independent parameter, and the main financial measurements are the capital structure, credit risk, efficiency, profitability, and firm size, will be the dependent parameter. This paper used non-parametric Mann Whitney Test, besides parametric by Regression of Dummy Variable. The empirical outcomes indicate that there are variances in capital structure, credit risk, efficiency, and firm size. There is no significant variance in profitability ratio. Japanese banks are more noticeable in terms of firm size and well in efficiency ratio and loan to deposit ratio. However, Japanese banks have a higher non-performing credit. The outcomes are significant at a = 1% for capital structure and efficiency ratio.

Keywords

Financial Ratio, Banking, Profitability, Foreign Ownership.

Full Text:

PDF

References

Alexakis, C., Izzeldin, M., Johnes, J., & Pappas, V. (2019). Performance and Productivity in Islamic and Conventional Banks: Evidence from the Global Financial Crisis. Economic Modelling, 79(3), 1-14.

Alnaa, S. E., Adongo, J., & Juabin, M. (2016). Comparative Analysis of Profitability of Local and Foreign Banks in Ghana. Asian Economic and Financial Review, 6(5), 238-246.

Castaldi, S., Gubbi, S. R., Kunst, V. E., & Beugelsdijk, S. (2019). Business Group Affiliation and Foreign Subsidiary Performance. Global Strategy Journal, 9(4), 595-617.

Chen, S., Nazir, M. I., Hashmi, S. H., & Shaikh, R. (2019). Bank Competition, Foreign Bank Entry, and Risk-Taking Behavior: Cross Country Evidence. Journal of Risk and Financial Management, 12(3), 106.

Fang, Y., Hasan, I., Leung, W. S., & Wang, Q. (2019). Foreign Ownership, Bank Information Environments, and the International Mobility of Corporate Governance. Journal of International Business Studies, 50(9), 1566-1593.

Fukuyama, H., & Weber, W. L. (2015). Measuring Japanese Bank Performance: a Dynamic Network DEA Approach. Journal of Productivity Analysis, 44(3), 249-264.

Ghosh, S. (2016). Foreign Banks in MENA Countries: How Important? How Relevant?. Journal of Economic and Administrative Sciences, 32(1), 77-98.

Haris, M., Hongxing, Y., Tariq, G., & Malik, A. (2019). An Evaluation of Performance of Public Sector Financial Institutions: Evidence From Pakistan. International Journal of Business Performance Management, 20(2), 145-163.

Haris, M., Yao, H., Tariq, G., Javaid, H. M., & Ain, Q. U. (2019). Corporate Governance, Political Connections, and Bank Performance. International Journal of Financial Studies, 7(4), 1-37.

Johan, S., Siregar, H., Santosa, P. W., & Maulana, T. N. A. (2012). Foreign Ownership and Financial Firms Performance: Empirical Evidence Indonesia Financial Services Industry. Jurnal Manajemen Teknologi, 11(3), 239-249.

Johan, S. (2018). The Strategic Rational of Banking Acquisition in Emerging Market. Journal Economics and Business Atmajaya Indonesia, 2(1), 13-21.

Delova-Jolevska, E., Andovski, I., & Jolevski, L. (2018). The Impact of Ownership of Banks on their Performance: Case Study of Sample of Balkan Countries. Ekonomika, 64(3), 55-65.

Liang, J., & Liu, B. S. C. (2015). Characteristics and Performance of Foreign Direct Investment in Retail Trade: the Case of Japanese Firms. Journal of Comparative International Management, 18(1), 37-55.

Lin, J. H., Lii, P. C., Huang, F. W., & Chen, S. (2019). Cross-border Lending, Government Capital Injection, and Bank Performance. International Journal of Financial Studies, 7(2), 1-20.

Luo, D., Dong, Y., Armitage, S., & Hou, W. (2017). The Impact of Foreign Bank Penetration on the Domestic Banking Sector: New Evidence from China. The European Journal of Finance, 23(7-9), 752-780.

Mori, N., & Towo, G. (2017). Effects of Boards on Performance of Local and Foreign-owned Banks in Tanzania. African Journal of Economic and Management Studies, 8(2), 160-171.

Nabi, M. G., Islam, M. A., & Bakar, R. (2019). Do Private Commercial Banks Outperform State-owned Commercial Banks? Empirical Evidence from Bangladesh. Journal of Applied Finance and Banking, 9(5), 167-186.

Nguyen, K. N. (2019). Revenue Diversification, Risk and Bank Performance of Vietnamese Commercial Banks. Journal of Risk and Financial Management, 12(3), 1-21.

Okere, W., Eluyela, F. D., Lawal, A. I., Oyebisi, I., Eseyin, O., Popoola, O., & Awe, T. E. (2019). Foreign Expatriates on Board and Financial Performance: a Study of Listed Deposit Money Banks in Nigeria. The Journal of Social Sciences Research, 5(2), 418-423.

Polovina, N., & Peasnell, K. (2015). The Effect of Foreign Management and Board Membership on the Performance of Foreign Acquired Turkish Banks. International Journal of Managerial Finance, 11(3), 359-387.

Suto, M., & Takehara, H. (2016). The Link between Corporate Social Performance and Financial Performance: Empirical Evidence from Japanese Firms. International Journal of Corporate Strategy and Social Responsibility, 1(1), 4-25.

Takata, H. (2016). Effects of Industry Forces, Market Orientation, and Marketing Capabilities on Business Performance: an Empirical Analysis of Japanese Manufacturers from 2009 to 2011. Journal of Business Research, 69(12), 5611-5619.

Yang, Z., Gan, C., & Li, Z. (2019). Role of Bank Regulation on Bank Performance: Evidence from Asia-Pacific Commercial Banks. Journal of Risk and Financial Management, 12(3), 131.

Yang, W., Zhao, B., Zhao, J., & Li, Z. (2019). An Empirical Study on the Impact of Foreign Strategic Investment on Banking Sustainability in China. Sustainability, 11(1), 181.

Vander Vennet, R., & Gropp, R. (2003). Cross-border Mergers in European Banking and Bank Efficiency. Proceedings. Foreign Direct Investment in the Real and Financial Sector of Industrial Countries, 295-321. Springer, Berlin, Heidelberg.

View Counter: Abstract - 402 and PDF - 467

Refbacks

  • There are currently no refbacks.


Bookmark and Share