Corporate Governance and Bank Performance: Experience with Ten Asian Countries

39 Pages Posted: 17 Jan 2017

See all articles by Amina Sobhy

Amina Sobhy

German University in Cairo

K. A. Mohamed Ehab

The German University in Cairo

Mostaq M. Hussain

UNBSJ

Date Written: January 16, 2017

Abstract

The objective of this paper is to examine the relationship between corporate governance and Bank performance in Asia. The study is carried on two hundred and twenty six banks during the period of 2009-2013 in ten Asian countries. Regression results show that (in Model 1) audit committee has a negative relationship with performance measured by ROA, this demonstrates a very inconsistent result with previous studies. There is also a negative relationship with board independence on performance measured by ROA and this is consistent with the stewardship theory - a positive relationship with Director Ownership, bank size, bank type and leverage on performance measured by ROA. The effect of corporate governance on banking performance measured by ROE (Model 2 shows) demonstrates that there is a negative relationship with Audit committee, board independence and ownership concentration on performance measured by ROE. There is also a negative relation with duality on performance measured by ROE, which is consistent with Agency theory, and a positive relationship with director ownership on performance measured by ROE. The effect of corporate governance on banking performance measured by NIM. This study finds that (Model 3), there is a negative relationship with remuneration committee on performance measured by NIM, and this result is very inconsistent with previous literature. A positive relationship with board meeting on performance measured by NIM is found in this study, and this is consistent with the Agency theory and a positive relation with duality on performance measured by NIM but this again consistent with stewardship theory. According to some new findings of this study, some research directions are given at the end of this paper.

Keywords: Board Characteristics, Ownership Structure, Corporate Governance, Bank Performance, Asia

JEL Classification: G21, M14, N25

Suggested Citation

Sobhy, Amina and Ehab, K. A. Mohamed and Hussain, Mostaq M., Corporate Governance and Bank Performance: Experience with Ten Asian Countries (January 16, 2017). Available at SSRN: https://ssrn.com/abstract=2900333 or http://dx.doi.org/10.2139/ssrn.2900333

Amina Sobhy

German University in Cairo ( email )

El Tagamoa El Khames
New Cairo City, 11835
Egypt

K. A. Mohamed Ehab

The German University in Cairo

Mostaq M. Hussain (Contact Author)

UNBSJ ( email )

Saint John, Canada
Saint John, New Brunswick E2L 4L5
Canada
506-6485805 (Phone)
506-648-5574 (Fax)

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