Good corporate governance rating and bank profitability in Indonesia: evidence from panel data

This study aims to examine the effectiveness of good corporate governance (GCG) using a case of public banks in Indonesia. The study uses three measures of profitability: the return on assets (ROA), return on equity (ROE), and net interest margin (NIM). Panel data methods are used that combine both micro- and macroeconomic variables. All the models confirm that a good corporate governance rating is positive and significant for pooled regression, fixed-effect (FE) regression, and random-effect (RE) regression. For the ROA equation, the best model is fixed effectsfor the ROE equation, the best model is pooled regressio