The determinants of bank stability: An empirical investigation in Southeast Asia

Sari, Niken Novita and Sudarmawan, Barianto Nurasri ORCID: https://orcid.org/0000-0002-9209-8687 (2023) The determinants of bank stability: An empirical investigation in Southeast Asia. Jurnal Ekonomi Syariah Teori dan Terapan, 10 (2). pp. 109-122. ISSN 2407-1935

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Abstract

This research aimed to examine the effect of institutional quality, financing growth, and earnings management on the stability of Islamic banks in Southeast Asia for the 2014-2021 period. The sampling technique used was purposive sampling and received 11 Islamic commercial banks from Brunei Darussalam, Indonesia, and Malaysia. Data sources were obtained from each bank’s financial statements and the
World Bank’s statements. The analysis method used was panel data regression analysis with Eviews 12 software. The results showed that the quality of institutions and the growth of financing had a significant effect on the stability of banks proxied by the Z-Score. The quality of institutions has a positive influence, while the growth
of financing has a negative effect on banks' stability. Furthermore, the variables of earnings management have no significant impact on the stability of the bank. This research was limited to a sample of countries in Southeast Asia, so it is expected to be a reference for improving the quality of institutions to support banking performance. The implications of this study are expected to be an evaluation for banks to pay more attention to their policies in financing expansion and improve the quality of financial statements to minimize earnings management practices whose
existence does not affect bank stability

Item Type:	Journal Article
Keywords:	bank stability; institutional quality; banking performance; financing
Subjects:	14 ECONOMICS > 1402 Applied Economics > 140207 Financial Economics
Divisions:	Faculty of Economics > Department of Islamic Banking
Depositing User:	Barianto Nurasri Sudarmawan
Date Deposited:	15 Nov 2023 11:47

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