ABSTRACT

This paper investigates the effect of provincial corruption on the performance of local development bank, specifically to the profitability and credit quality. We use the data of 26 local development banks in 2012 and 2013. For the provincial corruption measurement we use "Public Institution Openness Index". Results of this study are first, corruption significantly has a negative effect on the profitability of local development bank. Second, corruption doesn't affect the credit quality of local development bank. These results are expected to enrich the within country corruption effect to the economic studies, particularly to the local development bank which is infrequently investigated. AbstrakTulisan ini mencoba untuk mengetahui pengaruh korupsi propinsi terhadap kinerja Bank Pembangunan Daerah, khusunya terhadap profitabilitas dan kualitas kredit. Kami menggunakan data dari 26 Bank Pembangunan daerah pada tahun 2012 dan 2013. Untuk pengukuran korupsi provinsi digunakan "Indeks Keterbukaan Institusi Publik". Hasil dari penelitian ini adalah pertama, korupsi secara signifikan memiliki efek negatif pada profitabilitas Bank Pembangunan Daerah. Kedua korupsi tidak mempengaruhi kualitas kredit Bank Pembangunan Daerah. Hasil penelitian ini diharapkan dapat memperkaya studi tentang korupsi tingkat dalam negara, khususnya terhadap Bank Pembangunan Daerah yang jarang diteliti.

ABSTRACT

This research is based on a bank, a law entity in which one of the main activities is lending. This study aims to analyze the credit risk, i.e. non-performing loan and allowance for impairment losses towards the profitability represented by bank return on asset with operating expense to operating income as the intervening variable. The technique of data analysis is statistical descriptive analysis of research variable, multiple regression analysis and path analysis which aim to measure the effect of intervening variable. The results of this study show that Non-performing loan ratio has positive and significant effect on operating expense to operating income efficiency ratio, ratio allowance for impairment losses has positive, but not significant effect on operating expense to operating income efficiency.