Analysis of the Influence of Institutional Ownership on Bank Capital in Indonesia

Abstract

This study aims to find out how institutional ownership affects bank capital in Indonesia. Capital is a dependent variable in this study where capital is divided into Capital Ratio, Market Capital Ration, and tier 1 ratio. Independent institutional ownership is calculated by the amount of institutional ownership divided by the number of outstanding shares. In this study, there are five control variables, namely Market to Book, Size, Dummy, Profitability. This study uses a type of quantitative descriptive research with a dynamic panel data regression model using the Generalized Method Of Moment (GMM) estimation method. There are 47 banking companies in Asean that are the population in this study. The selection of population samples was carried out using the purposive sampling method, so that 31 banking companies were obtained that met the criteria as set by the researcher. This study uses secondary data in the form of annual financial publication reports of each bank. The results of the study showed that the independent variable of institutional ownership had a significant negative effect on the variable dependent Capital Ratio. Furthermore, it was obtained that the institutional ownership variable had a significant positive effect on the dependent Market Capital Ratio variable, and finally the institutional ownership variable had a negative and significant effect on the Tier-1 Ratio.