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Analysis of the Effect of Charter Value on Risk Behaviour of Go- Public Banks in Indonesia

Authors
  • Elsya Sari Nasution Department of Economics Development, Faculty of Economics and Business, Universitas Sumatera Utara
  • Syarief Fauzie Department of Economics Development, Faculty of Economics and Business, Universitas Sumatera Utara
Issue       Vol 8 No 1 (2025): Talenta Conference Series: Local Wisdom, Social, and Arts (LWSA)
Section       Articles
Section      

Copyright (c) 2025 Talenta Conference Series

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Galley      
DOI: https://doi.org/10.32734/lwsa.v8i1.2416
Keywords: charter value bank risk non performing loan z-score
Published 2025-02-28

Abstract

This study aims to determine the effect of charter value on the risk behavior of go-public banks in Indonesia. Risk behavior as the dependent variable in this study consists of two risks, namely, non-performing loans risk and bankruptcy risk (z-score). Charter value is an independent variable in the study which is calculated using the Tobin's q indicator. This study uses descriptive quantitative research with dynamic panel data regression models using the Generalized Method of Moment (GMM) estimation method. There are 35 selected banking institutions that meet the criteria as determined by the researcher. This study uses secondary data in the form of quarterly financial publication reports of each bank. The results obtained show that charter value has a significant negative effect on non-performing loans. Then, it is found that charter value has a significant positive effect on z-score.