PENCAPAIAN KEUNGGULAN KOMPETITIF SEBUAH START UP BUSINESS MELALUI OPTIMALISASI FAKTOR EKSTERNAL PERUSAHAAN DI KOTA SURABAYA

Abstract

The objective of this paper is to determine the impact of loan portfolio concentration on the returns of Indonesian banks. This paper uses a broad set of heuristic approaches to measure diversification and capture the deviation of a bank’s portfolio from a benchmark since conceivable benchmarks are naive diversification across all sectors. Thus, The Hirschman Herfindahl Index, Distance Measures and Deviation from average are applied as measures of concentration.The data covers the pre and post GFC periods from 2003-2011 for 109 commercial banks in Indonesia(981 bank year observations).The findings show that the sectoral loan portfolio concentration in Indonesia tend to decrease overall overtime with an increased focus on unspecified other sectors, which primarily refers to consumption.In addition, the impact of loan portfolio concentration on the returns varies with the concentration measures. These differences could serve as prominent information for Central Bank in the application of a set of heuristic approaches to measure concentration.