Why Capital’s Effect Differs in Bank Size?
Ahmad Aziz Putra Pratama

Ahmad Aziz Putra Pratama*, Master of Science in Management, Department of Management, Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia.
Manuscript received on October 05, 2019. | Revised Manuscript received on October 10, 2019. | Manuscript published on October 15, 2019. | PP: 24-27 | Volume-4 Issue-2, October 2019. | Retrieval Number: B0394104219/2019©BEIESP | DOI: 10.35940/ijmh.B0394.104219
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© The Authors. Published By: Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)

Abstract: Banks are trusted institutions. Therefore, bank management must use all of its operational tools to maintain the trust of the community. A strategic tool in sustaining that trust is adequate capital. Until now, banking activities remain the same, but with a different system. Novelty this research is a different effect of bank capital on lending behavior in each bank size category. This study used the fixed effect model in the 2004-2018 period. This study proved that smaller bank tends to implement aggressive strategies with lower capital and higher loan proportion, while larger bank manages to implement a defensive strategy with high capital and higher loan proportion.
Keywords:  ABank capital, Loan growth, Bank size