Article Per Year (5 Year)
p-Index From 2021 - 2026
0.23
P-Index
This Author published in this journals
All Journal Economy and Finance Enthusiastic
Nadya Ariana Dewi
Faculty of Economics and Business, Telkom University, Bandung, Indonesia
Economics, Econometrics & Finance

Published : 1 Documents Claim Missing Document
Claim Missing Document
Check
Articles

Found 1 Documents
Search

 1 
Economic Growth as a Boundary Condition for the Valuation Relevance of Bank Financial Ratios in Indonesia Nadya Ariana Dewi; Ardiani Nur Hidayati; Bala Ram Acharya; Mugaahed Saleh
Economy and Finance Enthusiastic Vol. 4 No. 1 (2026): January-June
Publisher : Tinta Emas Publisher

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.59535/efe.v4i1.709

Abstract

Investors may interpret bank financial ratios differently as the economy moves from expansion to contraction and recovery. This study examines the associations of net interest margin (NIM), return on assets (ROA), loan-to-deposit ratio (LDR), capital adequacy ratio (CAR), and non-performing loans (NPL) with year-end stock prices and evaluates whether gross domestic product (GDP) growth changes these relationships. A balanced panel of 27 banks listed on the Indonesia Stock Exchange from 2018 to 2022 yields 135 bank-year observations. Mean-centered interaction regression is employed. NIM and ROA are positively associated with stock prices, whereas NPL is negatively associated. LDR and CAR have no statistically significant direct association. Of the five interactions, only the LDR-GDP growth interaction is positive and significant, indicating that the market values credit deployment more strongly when the economy has greater capacity to absorb financing. GDP growth does not significantly condition the associations of NIM, ROA, CAR, or NPL with stock prices. The model explains 36.5% of stock-price variation (adjusted R² = 32.1%). These findings identify intermediation liquidity as the bank signal most sensitive to the growth cycle and show why bank ratios should not be interpreted uniformly across macroeconomic conditions.
Co-Authors Ardiani Nur Hidayati Bala Ram Acharya Mugaahed Saleh