Banking Governance Parameters Differentiated by size: Impact on Agency Cost

Baral, Riyanka; Patnaik, Debasis

doi:10.1177/09746862211007041

Cited by 1 publication

(2 citation statements)

References 58 publications

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“…By considering panel data regression analysis, the study finds an inverse as well as significant relationship between board independence and firm performance. Baral and Patnaik (2021) have investigated the interrelationship between board composition and agency cost relating to the 30 Indian banks from 2008 to 2018. They considered director, size of the board, woman on board and non-executive director as an explanatory variable.…”

Section: Review Of Literaturementioning

confidence: 99%

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Firm performance, vertical agency crisis and corporate governance of Indian listed companies

Sethi

Sahu

Maity

2022

AJEB

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PurposeThis study aims to examine the influence of corporate governance variables on firm performance and also to find out whether the corporate governance mechanism is capable of mitigating the vertical agency crisis. Here the researcher uses corporate governance mechanisms such as board meeting frequency, board independence, percentage of non-executive directors, percentage of woman directors on board and the board size to measure the firm performance and, at the same time, tries to mitigate the agency crisis, which is measured through return on asset and asset turnover ratio.Design/methodology/approachThe present study considers period from 2009 to 2020 with data corresponding to a panel of 271 non-financial firms listed in 500 NSE index, India. The study introduces a panel regression model to analyze the data collected from the sample firms.FindingsThe study detects a positive as well as a statistically significant relationship between board size and vertical agency cost. The study also observes a negative relationship between board independence and agency cost. Further, the study finds a positive relationship between corporate governance variables and firm performance, though it is non-significant.Originality/valueAs the study progresses, the study detects a negative relationship between non-executive directors and agency costs. This study tries to give policy prescription to the corporate policymaker regarding various measures to be taken by the firm for the improvement of firm performance and reduction of owner and manager conflict inside the company. The study fills the literature gap by revealing a significant relationship between corporate governance, vertical agency crisis and firm performance.

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Section: Review Of Literaturementioning

confidence: 99%

“…Baral and Patnaik (2021) have investigated the interrelationship between board composition and agency cost relating to the 30 Indian banks from 2008 to 2018. They considered director, size of the board, woman on board and non-executive director as an explanatory variable.…”

Section: Review Of Literaturementioning

confidence: 99%