Social institutions, corporate governance and firm-performance in the MENA region

et al. 2019

Heliyon

We examine the effect of corruption perception and institutional quality on the performance of firms based on the extracted data for 135 listed companies in Nigeria with timeframe 2013–2017. We first use the Transparency International Corruption Perception Index for the baseline analysis, which evaluates the public officials and politicians’ corruption practices. To capture institutional quality, which depicts the level of law enforcement to curb corruptive practices of the public officials, we use the first component via Principle Component Analysis of six governance indicators extracted from World Bank Governance Indicators. We then use the Generalized Method of Moment (GMM) for the analysis. We find that corruption is negatively related to the market value (TobinQ) and accounting value performance (ROA). Similarly, institutional quality is negatively related to TobinQ and ROA. The results suggest that corruption and institutional quality weaken the market and accounting performance firms in Nigeria. We further compare the extent of corruption and institutional quality on performance between financial and non-financial institution. We find that both corruption and weak institutional environment tend to impair the market and accounting-based performance of non-financial firms, which could be traced to the less regulatory body in such institution compared to the financial institution. We suggest that Nigeria needs more effective and strong mechanisms proactive to curb corruption practices and weak institutional quality.

Section: Resultssupporting

confidence: 86%

Section: Methodsmentioning

confidence: 99%

Corruption perception, institutional quality and performance of listed companies in Nigeria

Ojeka

et al. 2019

Heliyon

“…The performance of banking companies in Bangladesh is positively influence by its board size (Rahman & Islam, 2019). This finding is consistent with that of Mertzanis, Basuony, and Mohamed (2019) who also documents a significant positive relationship between board size and firm performance in MENA region.…”

Section: Page40supporting

confidence: 91%

“…Chief Executive Officer (CEO) (Adams, 2012). Further, board independence is found to be a significant negative predictor of firm performance among firms in MENA region (Mertzanis, Basuony, and Mohamed, 2019). H1: There is positive relationship between board independence and bank performance.…”

Section: Page40mentioning

confidence: 95%

The Role of Board Governance on Bank Performance

Zakaria

Purhanudin²,

Wahidudin³

2019

IJFBS

This study uses a sample of 119 commercial banks in Asia (specifically China, Philippine, Indonesia, Japan, Malaysia and Thailand) to test the impact of board governance on the bank performance. The result reported based on OLS and within estimators. In addition, two step system estimator is employed in this study to solve endogeneity problem in corporate governance literature. The finding reported that bank with large board and more independent directors sit on board it help the bank to achieve higher performance. The result shows that bank can achieve better performance with younger directors. While CEO duality and female directors are insignificant to influence the bank performance. The result also reported that the higher loan losses provision leads to bank performance decline. This study employ various governance characteristics towards performance among banking sector in selected Asian countries. The result of this study highlight the effectiveness of the board as a functioning device in monitoring and advising manager.

“…Thus, the family's ownership tends to bear any risk of poor performance. In furtherance of corporate governance structure and firm performance, Mertzanisa et al (2019) incorporate the effect of a social institution and firm-specific corporate governance and its effect on firm performance in MENA countries. The study avers the robust indicators of corporate governance such as board size and insider and ownership characteristics on firm performance, which identify the investors' awareness of the importance of corporate governance and firm performance.…”

Section: Corporate Governance Characteristics and Performance Of The mentioning

confidence: 99%

Firm Performance and Condensed Corporate Governance Mechanism: Evidence of Nigerian Financial Institutions

Ojeka

Business: Theory and Practice

et al. 2019

This paper extends the prior studies on corporate performance by empirically exploring the impact of overall corporate governance structure on firm performance. To unveil the objective of this study, firstly corporate governance index is built using Principal Component Analysis with 6 (six) identified corporate governance mechanisms from prior studies and then examines its effect on firms’ performance. This study draws a sample of twenty-four (24) financial companies from the listed financial institutions in Nigeria for the period of 2013–2017. The formulated hypotheses are tested by employing static panel data estimators that are Fixed effect and Random Effect Regression. The results reveal that while controlling for firms’ characteristics, constructed corporate governance indicator has a significant and negative influence on the firm performance measured by Return on Asset and Return on Equity. This finding supports that larger board, larger board committees and significant executive involvement have a detrimental influence on the performance of firms. The result implies a weak corporate governance structure is detrimental to higher financial performance amidst the weak institutions characterized in Nigeria context. That is, weaker corporate governance exhibits lower financial performance. This study then recommends that the corporate governance structure in Nigeria listed firms should be review with the intention to enhance the firm performance. Furthermore, it encourages the regulatory agencies like Central Bank of Nigeria, National Insurance Commission and Securities and Exchange Commission, to monitor the compliance of the listed firms to good governance endeavour.