Muslim CEOs and bank risk-taking: Evidence from Indonesia

Chai-Aun Ooi, Doddy Setiawan and Chee-Wooi Hooy

Global Finance Journal, 2021, vol. 50, issue C

Abstract: This study investigates the relationship between Muslim CEOs and bank risk-taking based on Indonesian banks from 2010 to 2017. We find that there is no significant difference in risk-taking among Indonesian banks based on whether the banks have Muslim CEOs or not. However, we find that only state-owned banks with Muslim CEOs display significantly low risk-taking. We further find that foreign-owned banks with Muslim CEOs display a significant low risk-taking only in the presence of Muslim-dominated boards. We show that Muslims must be in the majority on 2-tier boards (board of directors and board of commissioners) to significantly influence Muslim CEOs' risk-taking. In addition, we find no related evidence from family-owned firms. Further analysis reveals that banks with a low concentration of ultimate ownership indicate Muslim CEOs' low risk-taking behaviour, and vice versa.

Keywords: Banks; CEO; Muslim; Risk-taking, Indonesia (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1044028318302242
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:50:y:2021:i:c:s1044028318302242

DOI: 10.1016/j.gfj.2019.100507

Access Statistics for this article

Global Finance Journal is currently edited by Manuchehr Shahrokhi

More articles in Global Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().