Corporate Governance and Bank Performance in Indonesia: A Panel Analysis with Ownership Moderation and HAC Robust Inference
DOI:
https://doi.org/10.37385/8drnre19Keywords:
Board Independence, Board Size, Corporate Governance, Gender Diversity, Indonesian Banks, Ownership Type, Return on AssetsAbstract
Background: Corporate governance has long been recognised as a determinant of firm performance, yet evidence from emerging market banking sectors remains mixed, particularly when institutional heterogeneity between state-owned and private banks is not accounted for. Objective: This study examines the effect of board size, board independence, and gender diversity on return on assets (ROA) in Indonesian listed commercial banks, with ownership type (state-owned versus private) as a moderating variable. Method: Pooled ordinary least squares regression with Newey-West HAC standard errors is applied to a panel of 18 Indonesian listed commercial banks over 2022–2024 (54 observations). Results: Governance characteristics do not exert significant direct effects on ROA, attributed to regulatory homogeneity imposed by the Financial Services Authority (OJK). However, ownership type significantly moderates the governance-performance relationship: board size negatively affects ROA in private banks (β = −0.0031, p < 0.01) but this effect is reversed for state-owned banks via a positive interaction term (β = +0.0069, p < 0.001); gender diversity generates significant performance benefits exclusively in state-owned banks (β = +0.0498, p < 0.001). Bank size and NPL ratio are significant control determinants. Conclusion: Ownership structure is a critical institutional boundary condition for the governance-performance nexus in Indonesian banking, with implications for regulatory design and board appointment policy in state-owned enterprises.
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