Corporate Governance Mechanisms and Bank Performance: Evidence from the Greek Banks during Crisis Period

Investment Management and Financial Innovations, Volume 14, Issue 1, 2017

13 Pages Posted: 3 Jul 2019

See all articles by Andreas G. Georgantopoulos

Andreas G. Georgantopoulos

National and Kapodistrian University of Athens; Panteion University of Athens - Panteion University of Political and Social Sciences

John Filos

Panteion University of Athens - Panteion University of Political and Social Sciences

Date Written: 2017

Abstract

This paper is the first research attempt that investigates the impact of a large number of corporate governance mechanisms on the performance of Greek banks, employing widely accepted in the literature of corporate governance econometric models. Results indicate that system GMM models are more suitable methodological tools than pooled OLS and fixed effects models to address well-known econometric problems, such as endogeneity, simultaneity and unobserved heterogeneity of individual banks. The findings, as derived from the application of GMM models, imply that increasing the board size and the number of independent directors can both have a positive impact on the performance of Greek banks, but only up to a certain point. Thus, bank efficiency will increase as board size and the proportion of independent directors grow up to a point where these relationships hit a maximum from which bank performance decreases. Our multi-model estimations failed to trace any significant contribution of the number of female and foreign directors on the performance of Greek banks. Finally, the dual appointment of a CEO as Chairman appears to affect negatively two out of four proxies of bank performance. Overall, the results provide support for the positive impact of corporate governance mechanisms on the performance of Greek banks. The significance of these findings increases, considering that the period under study (2008-2014) is marked by high market volatility and uncertainty due to the well-known debt crisis that plagues Greece since the beginning of 2008.

Keywords: banking, corporate governance, crisis, board structure

JEL Classification: C52, G34, G21

Suggested Citation

Georgantopoulos, Andreas G. and Filos, John, Corporate Governance Mechanisms and Bank Performance: Evidence from the Greek Banks during Crisis Period (2017). Investment Management and Financial Innovations, Volume 14, Issue 1, 2017, Available at SSRN: https://ssrn.com/abstract=3413713

Andreas G. Georgantopoulos (Contact Author)

National and Kapodistrian University of Athens ( email )

Greece

Panteion University of Athens - Panteion University of Political and Social Sciences ( email )

136 Sygrou
Athens
Greece

John Filos

Panteion University of Athens - Panteion University of Political and Social Sciences ( email )

136 Sygrou
Athens
Greece

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
28
Abstract Views
272
PlumX Metrics