• ISSN: 2010-0248 (Print)
    • Abbreviated Title: Int. J. Innov.  Manag. Technol.
    • Frequency: Quarterly
    • DOI: 10.18178/IJIMT
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HOME > Archive > 2022 > Volume 13 Number 2 (May 2022) >
IJIMT 2022 Vol.13(2): 37-41 ISSN: 2010-0248
doi: 10.18178/ijimt.2022.13.2.918

The Effect of Productive Asset Diversification on Discretionary Behavior on Allowance for Loan Losses

Ignatia Ryana Widyatini and Raymundo Patria Hayu Sasmita

Abstract—The first objective of this study is to determine whether the discretionary behavior is built by diversification or concentrated productive asset financing. Discretionary behavior reflects the value of additional losses to form Allowance for Loan Losses or ALL based on several management motivations. The formation of ALL aims to maintain the quality of productive assets and the health of banks. Discretionary behavior is estimated from the difference between the total ALL and the non-discretionary component presented through a portfolio of economic impairment. Specifically, the concentration of banking asset financing in this study is classified based on the type of loan. This study examines the effect of the concentration of asset financing on loan distribution toward discretionary behavior. This research was conducted in several commercial banks in Indonesia.

Index Terms—Discretionary behavior, allowance for loan losses, productive assets.

The authors are with the Faculty of Business and Economics, the Universitas Atma Jaya Yogyakarta of Indonesia, Indonesia (e-mail: ryana.widyatini@uajy.ac.id).

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Cite: Ignatia Ryana Widyatini and Raymundo Patria Hayu Sasmita, "The Effect of Productive Asset Diversification on Discretionary Behavior on Allowance for Loan Losses," International Journal of Innovation, Management and Technology vol. 13, no. 2, pp. 37-41, 2022.

Copyright © 2022 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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