The Impact of Corporate Governance (CG) on Firm Performance: Evidence from Emerging Countries Banking Industry
DOI:
https://doi.org/10.12775/CJFA.2023.009Keywords
ROA, leverage, FP, CG, banks, GCCAbstract
The aim of the study to find if there is an impact caused by corporate governance CG on the firm performance (FP) using ROA as a measure. The study covered the listed 9 commercial banks in the Kuwait Stock Exchange. The period covered in this study is 10 years starting from 2011 until 2020. The study used the number of members of the board of directors (BoD), role duality of CEO and chairperson of the BoD and the number of women in the board of director as variables representing the CG. The data was processed and analyzed properly using regression model. The study concludes that there is significant relationship between (CG) and firm performance. Moreover, the variables of CG all have insignificant relationship with the ROA. Furthermore, the bank size which represent the total assets have significant positive relationship with the ROA. The researchers faced several limitations during the preparation of the study, a handful suggestions has been given for future researchers to overcome the limitation.
References
Abdullah, S., Ku Ismail, K.N.I., & Nachum, L. (2012). Women on boards of Malaysian firms: Impact on market and accounting performance. Academy of Management Annual Meeting Proceedings, 1(1), 1-35. http://dx.doi.org/10.2139/ssrn.2145007.
Ahmed, E., & Hamdan, A. (2015). The Impact of Corporate Governance on Firm Performance: Evidence from Bahrain Bourse. International Management Review, 11(2), 21-37.
Almoneef, A., & Samontaray, D.P. (2019). Corporate Governance and firm performance in the Saudi Banking Industry. Banks and Bank Systems, 14(1), 147–158. http://dx.doi.org/10.21511/bbs.14(1).2019.13.
Al-Sahafi, A., Rodrigs, M., & Barnes, L. (2015). does Corporate Governance affect financial performance in the banking sector? evidence from saudi arabia. International Journal of Economics, Commerce and Management, 3(3), 1-26.
Al-Shammari, B., & Al-Sultan, W. (2009). Corporate Governance and corporate performance: Evidence from Kuwait. Corporate Ownership and Control, 7(1), 334–349. http://dx.doi.org/10.22495/cocv7i1c3p1.
Arouri, H., Hossain, M., & Muttakin, M.B. (2011). Ownership structure, Corporate Governance and Bank Performance: Evidence from GCC countries. Corporate Ownership and Control, 8(4), 365–372. http://dx.doi.org/10.22495/cocv8i4c3art5.
Balagobei, S.B. (2018). Corporate Governance and Firm Performance: Empirical Evidence from Emerging Market. Asian Economic and Financial Review, 8(12), 1415–1421. http://dx.doi.org/10.18488/journal.aefr.2018.812.1415.1421.
Bansal, A., Samontaray, D.P., Aljalahma, A.K.A., & Khadim, D.T . (2023). Does the Board Influence the Bank’s Performance? An Islamic & Commercial Banking Experience. Intern. Journal of Profess. Bus. Review, 8(3), 01-17. http://dx.doi.org/10.26668/businessreview/2023.v8i3.1080.
Buallay, A. (2019). Corporate Governance, sharia’ah governance and performance. International Journal of Islamic and Middle Eastern Finance and Management, 12(2), 216–235. http://dx.doi.org/10.1108/imefm-07-2017-0172.
Buallay, A., Hamdan, A., & Zureigat, Q. (2017). Corporate Governance and firm performance: Evidence from Saudi Arabia. Australasian Accounting, Business and Finance Journal, 11(1), 78–98. http://dx.doi.org/10.14453/aabfj.v11i1.6.
Carter, D.A., Simkins, B.J., & Simpson, W.G. (2003). Corporate Governance, board diversity, and firm value. The Financial Review, 38(1), 33–53. http://dx.doi.org/10.1111/1540-6288.00034.
Danoshana, S., & Ravivathani, T. (2013). The impact of Corporate Governance on form performance: A study on financial institutions in Sri Lanka. Journal of Accounting, Auditing, Economics and Finance, 1(6), 118–121.
Endraswati, H. (2018). Gender Diversity in Board of Directors and Firm Performance: A Study in Indonesia Sharia Banks. Review of Integrative Business and Economics Research, 7(1), 299-311.
Fallatah, Y., & Dickins, D. (2012). Corporate Governance and firm performance and value in Saudi Arabia. African Journal Of Business Management, 6(36), 10025-10034. http://dx.doi.org/10.5897/ajbm12.008.
Farhan, A., Obaid, S.N., & Azlan, H. (2017). Corporate Governance effect on firms’ performance – evidence from the UAE. Journal of Economic and Administrative Sciences, 33(1), 66–80. http://dx.doi.org/10.1108/jeas-01-2016-0002.
Fauzi, F., & Locke, S. (2012). Board structure, ownership structure and firm performance: A study of New Zealand listed-firms. Asian Academy of Management Journal of Accounting and Finance, 8(2), 43–67.
Jayendrika, W.A.D.K., Priyadarshanie, W.A.N., & Samarakoon, S.M.R.K. (2014). The Impact of Corporate Governance on Firms' Financial Performance. Journal of Accountancy & Finance, 1(2), 38–48.
Kajola, S.O. (2008). Corporate Governance and Firm Performance: The Case of Nigerian Listed Firms. European Journal of Economics, Finance and Administrative Sciences, 14, 16-28.
Khanchel El Mehdi, I. (2007). Empirical Evidence on Corporate Governance and Corporate Performance in Tunisia. Corporate Governance an International Review, 15(6), 1429–1441. http://dx.doi.org/10.1111/j.1467-8683.2007.00655.x.
Mashayekhi, B., & Bazaz, M.S. (2008). Corporate Governance and firm performance in Iran. Journal of Contemporary Accounting & Economics, 4(2), 156–172. http://dx.doi.org/10.1016/s1815-5669(10)70033-3.
Mousa, G.A., Desoky, A.M., & Khan, G.U. (2018). The Association between Corporate Governance and Corporate Social Responsibility Disclosure – Evidence from Gulf Cooperation Council Countries. Academy of Accounting and Financial Studies Journal, 22(4), 1-19. http://dx.doi.org/10.2139/ssrn.3354398.
Naushad, M., & Malik, S.A. (2015). Corporate Governance and bank performance: A study of selected banks in GCC region. Asian Social Science, 11(9), 226-234. http://dx.doi.org/10.5539/ass.v11n9p226.
Neffati, A., Khiari, W., & Lajmi, A. (2020). Corporate governance and post-merger performance: evidence from US banks. Copernican Journal of Finance & Accounting, 9(3), 99–113. http://dx.doi.org/10.12775/CJFA.2020.014.
Osman, M.A.M., & Samontaray, D.P. (2022). Corporate Governance and Performance of Insurance Companies in the Saudi Market. The Journal of Asian Finance, Economics and Business, 9(4), 213-228. http://dx.doi.org/10.13106/jafeb.2022.vol9.no4.0213.
Pillai, R., & Al-Malkawi, H.-A.N. (2018). On the relationship between Corporate Governance and firm performance: Evidence from GCC countries. Research in International Business and Finance, 44, 394–410. http://dx.doi.org/10.1016/j.ribaf.2017.07.110.
Saidat, Z., Silva, M., & Seaman, C. (2019). The relationship between Corporate Governance and financial performance. Journal of Family Business Management, 9(1), 54–78. http://dx.doi.org/10.1108/jfbm-11-2017-0036.
Singh, G., & Dwesar, R. (2022). Board Gender Diversity, Firm Performance and Firm Risk: A Literature Survey. Copernican Journal of Finance & Accounting, 11(3), 69–84. http://dx.doi. org/10.12775/CJFA.2022.014.
Zabri, S.M., Ahmad, K., & Wah, K.K. (2016). Corporate Governance Practices and Firm Performance: Evidence from Top 100 Public Listed Companies in Malaysia. Procedia Economics and Finance, 35, 287–296. http://dx.doi.org/10.1016/s2212-5671(16)00036-8.
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
Stats
Number of views and downloads: 264
Number of citations: 0
