The effect of macroeconomic and bank-specific variables on non-performing loans with bank size as a moderating variable
Keywords:
Macroeconomics; Bank Specifics; Non-Performing Loans; Bank Size; Moderating VariableAbstract
This study aims to examine and prove the effect of macroeconomic variables (GDP, inflation, interest rates, and exchange rates) and bank-specific variables (bank efficiency, operational diversification, and risk-taking behavior) on non-performing loans with bank size as a moderating variable. The research results are expected to enrich scientific insights in the field of economics so that they can benefit academics and practitioners. The research sample uses financial report data for commercial banks listed on the Indonesia Stock Exchange, GDP data submitted by the Central Bureau of Statistics, and inflation, interest rates, and exchange rate data contained in Bank Indonesia Reports for the period 2016 to 2020. The results of this study show that GDP, inflation, interest rates, exchange rates, and bank efficiency have a positive effects on NPLs. Still, operational diversification and risk-taking behavior of banks do not have effects on NPLs. Then, bank size moderates by weakening the positive influence of GDP, inflation, interest rates, exchange rates, and bank efficiency on NPL. Meanwhile, bank size does not moderate the effect of diversification of operations and banks' risk-taking behavior on NPL.
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