Economic Journal of Emerging Markets
Volume 10 Issue 2, 2018

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

Faaza Fakhrunnas (Department of Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia)
Wulan Dari (Durham University Business School, Durham University, United Kingdom)
Mustika Noor Mifrahi (Department of Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia)



Article Info

Publish Date
02 Jul 2018

Abstract

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 banks’ risk mitigation.

Copyrights © 2018






Journal Info

Abbrev

JEP

Publisher

Subject

Economics, Econometrics & Finance

Description

The Economic Journal of Emerging Markets (EJEM) is a peer-reviewed journal which provides a forum for scientific works pertaining to emerging market economies. Published every April and October, this journal welcomes original research papers on all aspects of economic development issues. The journal ...