A Review of Corporate Governance: Ownership Structure of Domestic-Owned Banks in Term of Government Connected Ownership, and Foreign Ownership of Commercial Banks in Malaysia

Kim, Peong; Rasiah, Devinaga; Tasnim, Rahayu

doi:10.5171/2012.335681

Cited by 14 publications

(10 citation statements)

References 31 publications

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“…The CEOs shareholding refers to the proportion of capital held by the CEOs. This proportion was determined by dividing the number of shares held by the CEOs by the total number of banks' shares, following earlier studies [55,56]. An independent director is a director who is not an employee of the corporation and, by the excellence of being liberated from any correlation with board members, is less obligated to the executives [57].…”

Section: Description Of Variablesmentioning

confidence: 99%

Evaluating Corporate Performance and Bank Productivity in China: The Moderating Role of Independent Directors

Khan

Wang

2021

Sustainability

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Corporate governance (CG) is not an abstract goal. It exists to serve the bank’s purpose by giving a framework through which investors, directors, and the top management can efficiently follow its objectives. Subsequently, it boosts the financial performance of the bank for its shareholders. This paper explores CG and its impacts on financial performance from the evidence collected from selected commercial banks (CB) in China. The data sample for this research comprises selected CBs in China for the period from 2008 to 2019. Applying selection standards provides us a data sample of 17 CBs. We employed the generalized method of moments (GMM) regression model constructed on 170 observations to identify the variables’ relationship. Our findings show that female independent directors positively and significantly affect bank financial performance. Despite the literature review, we found that the existence of female directors alone does not positively and significantly improve banks’ financial performance. The finding suggests that female directors are more efficient when they are selected as independent directors. The findings show that CEO duality affects bank financial performance positively and significantly. CEO duality strengthens the financial performance of CBs because of the solidarity of the order it presents. The results also show that CEO shareholding and financial performance of Chinese CBs have a positively significant bond with each other. This result suggests that a blend of CG instruments is more impressive than one CG component. The investigation results added a new dimension to the governance literature that could be an important source of knowledge for policymakers and regulators to improve the current governance structure for better performance across countries. This paper support principal-agent theory and the author also provide some help for the theories that regulators should support gender quotas in the board of directors of banks to decrease risk-taking behavior.

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Section: Description Of Variablesmentioning

confidence: 99%

Evaluating Corporate Performance and Bank Productivity in China: The Moderating Role of Independent Directors

Khan

Wang

2021

Sustainability

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“…Corporate governance can be improved by encouraging managers to follow the pursuit of shareholder value as a priority. Kim, Rasiah, and Tasnim (2012) studied the connection between corporate governance and bank performance in Malaysia before and after the Asian financial crisis. In the study, it was discovered that the use of corporate governance in the banking sector became a concern as a result of the Asian financial crisis.…”

Section: Review Of Empirical Literaturementioning

confidence: 99%

Corporate Governance and Financial Performance of Banks in Nigeria

Abdullahi¹,

Isyaku²

2021

theijbm

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“…As mentioned in the previous section, empirical literatures have documented mixed evidences between ownership concentration and bank risk-taking. Bouvatier et al (2014); Kiruri (2013); Demsetz and Villalonga (2001); Anstoniadis (2010) and Kim et al (2012) note that majority shareholders (i.e. top five shareholders) influence firms' decision-making and strategy through their voting right.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…This is measured as the sum of the squared ownership shares of the five largest shareholders of the banks. HHI is a robust measure and has been used extensively in other empirical studies to examine ownership concentration (Kim et al, 2012;Dong et al, 2014;Hou et al, 2016;Demsetz and Lehn, 1985). To test ownership structure, we follow Agusman et al (2014) and divide the sample into two types of banks (i.e.…”

Section: Measures Of Ownership Concentration and Ownership Structurementioning

confidence: 99%

Impact of ownership structure and ownership concentration on credit risk of Chinese commercial banks

Yang

Brahma

Boateng

2019

IJMF

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Purpose The purpose of this paper is to examine the effects of bank ownership structure and ownership concentration on credit risk. Design/methodology/approach Using panel data on a sample of 88 Chinese commercial banks, with 826 observations over a period of 2003–2018, this study has applied system generalised method of moments regression to examine the impact of bank ownership structure and ownership concentration on credit risk. This study has used two measures of credit risk, which are non-performing loan ratio (NPLR) and loan loss provision ratio (LLPR). Findings The results show that ownership type (both government and private ownership) exerts a positive and significant impact on credit risk. Measuring ownership concentration using Herfindahl–Hirchmann Index, the results indicate that concentration of ownership in the hands of government has a negative and significant effect on credit risk, whereas private ownership concentration positively impacts credit risk. Overall, the findings suggest that concentration of ownership in government hands reduces risk; however, private ownership concentration exacerbates credit risks. The results are invariant to both measures of credit risk, before and after the financial crisis. Practical implications The findings provide useful insight to guide policy decisions in Chinese banks’ lending policies and bank ownership. Originality/value Using two ex post measures of credit risk, NPLR and LLPR, and one ownership concentration measure, HHI, this study deepens our understanding on the effectiveness of Chinese banks’ corporate governance reforms on managing credit risks.

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A Review of Corporate Governance: Ownership Structure of Domestic-Owned Banks in Term of Government Connected Ownership, and Foreign Ownership of Commercial Banks in Malaysia

Cited by 14 publications

References 31 publications

Evaluating Corporate Performance and Bank Productivity in China: The Moderating Role of Independent Directors

Evaluating Corporate Performance and Bank Productivity in China: The Moderating Role of Independent Directors

Corporate Governance and Financial Performance of Banks in Nigeria

Impact of ownership structure and ownership concentration on credit risk of Chinese commercial banks

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