ABSTRACT
ASEAN Economic Community has made the competition between it’s member
even fiercer. Because of it, these nation must now need a competitive edge if they want to
stay in the game. Every year the World Economic Forum released the global
competitiveness index. Competitiveness pushes the banking industry to have a good
corporate governance one of which in it is ownership structure, which is made out of
blockholders, institutional ownership, and insider ownership.
The method of sampling for this research uses a purposive sampling with the data
taken from every banking establishment around the ASEAN region. While doing an
examination of the research using the ordered logit model. This study found that
blockholders, insider ownership, and global competitiveness index have a significant
influence towards credit rating but, an institution ownership does not have a significant
influence towards credit rating.
The bigger the blockholders ownership, the bigger it’s power to push their
management to obeying their choices. In this research found that the insider ownership
majority are owned by the board of commissioners. Because of that, they could increase
surveillance towards management and in doing so depressing management’s decisions.
Company performance that are seen as good will be viewed positively by the credit
rating agency, doing so their competitiveness would increase and in turn their credit
rating would be better also. The institutional ownership isn’t influencing significantly
because banking establishments in ASEAN are a regulated firm.
Keywords: Ownership Structure, Competition, Credit Rating, Banking