Abstract
Indonesia’s financial sector is highly dominated by the banking industry than the non-bank. It controlled almost 74% of Indonesia’s financial assets in 2014. After post-crisis restructuration, the banking sector has become stronger, with a higher capital adequacy ratio and profitability. While, the non-bank financial industry is expected to solve the problems in the Indonesian economy, as well as becoming one of the long-term economic instruments. The purpose of this study is to test and analyse the effect of financial performance and the implementation of corporate governance on the non-bank financial industry stock prices on the Indonesia Stock Exchange in 2012-1016. The research population includes the non-bank financial industry listed in IDX, as many as 37 companies. This study found the probability, managerial ownership, institutional ownership and the composition of the independent commissioner partially and simultaneously does not significantly influence the stock price of the non-bank financial industry.
Highlights
The non-bank financial industry is an industry consisting of institutions engaged in providing financial services, but they do not hold a banking license, preventing them from withdrawing deposits from the customers
This study found the probability, managerial ownership, institutional ownership and the composition of the independent commissioner partially and simultaneously does not significantly influence the stock price of the non-bank financial industry
The respondents’ data in this research identify the matters that are related to the company policy. It is the influence of financial performance and the implementation of good corporate governance on the stock price
Summary
The non-bank financial industry is an industry consisting of institutions engaged in providing financial services, but they do not hold a banking license, preventing them from withdrawing deposits from the customers. The non-bank financial industry receives a competition. The non-bank financial industry is expected to solve the problems in the Indonesian economy, as well as becoming one of the long-term economic instruments and have to pay attention to risk management. Viswanathan, and Vuillemey (2019) found that financial constraints in the financial industry impede risk management. Indonesian financial industry such as banking and non-banking must have the capability to adjust to the change to keep the good perform (Sulistyani, Ghozali, & Isgiyarta, 2017)
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