The Relationship Between Board Diversity, Ownership Structure and Bank Performance In Tunisian Market

Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 18 October 2019

The Relationship Between Board Diversity, Ownership Structure and Bank Performance In Tunisian Market

Wissem Daadaa

Université de Carthage, Tunisia

Download Full-Text Pdf

10.31014/aior.1992.02.04.154

Pages: 1106-1117

Keywords: Bank Governance, Ownership Structure, Board Characteristics, Banking Performance

Abstract

This research focuses on the impact of internal governance mechanisms on the performance of listed Tunisian banks during the period 2005-2016. We try to detect the impact of banking governance, not only through the ownership structure but also through the board of director’s characteristics, on the banking performance. Our results confirm the importance of board control within the bank, but they also state that there are other mechanisms such as the ownership structure that must also be taken into account. Research shows that the ownership concentration, board size, independent and institutional administrators affect bank performance. Likewise, Duality is positively associated with the bank profitability.

References

  1. Adams, R.B. and Mehran, H. (2005)" Corporate performance, board structure and its determinants in the Banking industry." Working paper
  2. Adams, R.B. and Mehran, H. (2012) “Bank board structure and performance: Evidence for large bank holding companies” Journal of financial intermediation 21, 243-267
  3. Aebi, V., Sabato, G. and Schimd, M. (2012)”Risk management, corporate governance, and bank Performance” Journal of Banking & Finance Volume 36, Issue 12, December 2012, pp 3213-3226
  4. Arie Pratama (2018), “Does corporate governance affect related party transaction? A study on Indonesian companies listed on Indonesian stock exchange “ International Journal of economic policy in emerging economics volume 11 pp470- 478
  5. Barclay M. et Hoderness C. (1991)” Negociated blocktrades and corporate control” Journal of finance, Vol 46, p. 861-878.
  6. Barth J. (2004). Bank regulation and supervision: what works best?. Journal of Financial Intermediation, 13, pp205 248.
  7. Ben bouheni et al,(2018), Analyzing Governance Structure of French Banking Groups Research in International Business and Finance forthcoming 2018
  8. Berger, A.N., Clarke, G.R., Cull, R., Klapper, L., Udell, G.F., (2005). Corporate governance and bank Performance J. Bank. Finance 29 (8), 2179–2221.
  9. Buch, C.M., DeLong, G., (2004). Cross-border bank mergers: what lures the rare animal? J. Bank. Finance 28 (9), 2077–2102.
  10. Boubakri, N., Cosset, J.-C., Fischer, K., Guedhami, O., ( 2005). Privatization and bank performance in Developing countries. J. Bank. Finance 29 (8), 2015–2041.
  11. Caprio G., Laeven L. et Levine R. (2006), "Governance and Bank Valuation," "Journal of Financial Intermediation, Elsevier, vol. 16(4), pages 584-617, October
  12. Claessens, L. Laeven (2004)“What drives bank competition? Some international evidence”pp563 -583
  13. Coles, J. L., Daniel, N. D. and Naveene, L. (2008). Boards: Does one size fit all? Journal of Financial Economics, 87, 329 356.
  14. Cooper, W.E. (2008). Monitoring and governance of private banks. The Quarterly Review of Economics and Finance, 49, 253-264.
  15. Cornett, M. M., McNutt, J. J. and Tehranian, H. (2009). Journal of Corporate Finance, 15, 412 430.
  16. Cornett, M.M., Guo, L., Khaksari, S., Tehranian, H., (2010). The impact of state owner- ship on performance " J. Financ. Intermed. 19 (1), 74–9
  17. Dedu.V et Chitan (2013): « The influence of internal corporate governance on bank performance an empirical analysis for Romania Procedia - Social and Behavioral Sciences 99 ( 2013 ) pp1114 – 1123
  18. Fama, E. and Jensen, M. (1983). Agency problems and residual claims, Journal of Law and Economics, vol. 26 (no.2), 327-349.
  19. Fakhfakh Hamadi, Ben Atitallah Rihab, Ben Jedidia Lotfi (2009): governance and economic growth in transition countries International Journal of economic policy in emerging economics volume 2 pp1-19
  20. Fethi, M.D., Shaban, M., Weyman-Jones, T., (2011). Liberalisation, privatisation and the productivity of egyptian banks: a non-parametric approach. Serv. Ind. J. 31 (7), 1143–1163.
  21. Goddard, J., Molyneux, P., Williams, J., (2014). Dealing with cross-firm heterogeneity in bank efficiency estimates: some evidence from latin america. J. Bank. Finance 40, 130–142.
  22. Iannotta, G., Nocera, G., Sironi, A., (2007). Ownership structure, risk and performance in the European banking industry. J. Bank. Finance 31 (7), 2127–2149.
  23. Jensen, M., Meckling, W. (1976). Theory of the firm: managerial behavior, agency costs, and ownership structure. Journal of financial economics
  24. Jiang, C., Yao, S., Zhang, Z. , (2009). The effects of governance changes on bank efficiency in china: a stochastic distance function approach. China Econ. Rev. 20 (4), 717–731. Journal of Banking and Finance, 36, 3213-3226.
  25. Jiang, C., Yao, S., Feng, G., (2013). Bank ownership, privatization, and performance: evidence from a transition country. J. Bank. Finance 37 (9), 3364–3372.
  26. Mian, A., (2003). Foreign, private domestic, and government banks: new evidence from emerging markets. J. Bank. Finance 27 (7), 1219–1410 .
  27. Micco, A., Panizza, U., Yanez, M., (2007). Bank ownership and performance. Does politics matter? J. Bank. Finance 31 (1), 219–241.
  28. Minton, B., Taillard, J.P.A., Williamson, R. (2010). Do independence and financial expertise of the board matter for risk taking and performance SSRN
  29. Ozili.P, OlayinkaUadiale (2017) Ownership concentration and bank profitability Future Business Journal pp159–171
  30. Pathan, S. (2009). Strong boards, CEO power and bank risk-taking. Journal of Banking & Finance, 33, pp1340-1350.
  31. Pinteris (2002)"Ownership structure, Board characteristics and performance of Argentine Banks," Working Paper
  32. Shaban.M, Gregory A. James(2018), The effects of ownership change on bank performance and risk exposure: Evidence from indonesia Journal of Banking and Finance 88 (2018) 4 83–4 97
  33. Saibal Ghosh, Jugnu Ansari ( 2018), Board characteristics and financial performance: Evidence from Indian cooperative banks journal of Co-operative Organization and Management forth coming 2018
  34. Stefanescu, C.A. (2011) Evidence from Romania. Procedia Social and Behavioral Sciences, 24, pp1311-1321.
  35. Weill L. (2006), « Propriété étrangère et efficience technique des banques dans les pays en transition : Une analyse par la méthode DEA », Revue économique n°5 Vol. 57, p. 1093-1108.

About Us

The Asian Institute of Research is an online and open-access platform to publish recent research and articles of scholars worldwide. Founded in 2018 and based in Indonesia, the Institute serves as a platform for academics, educators, scholars, and students from Asia and around the world, to connect with one another. The Institute disseminates research that is proven or predicted to be of significant influence for the general public.

Stay Connected

  • Instagram - Black Circle
  • Facebook - Black Circle
  • LinkedIn - Black Circle

Contact Us

Please send all inquiries to the email:

editorial@asianinstituteofresearch.org

Business Address:

5th Floor, Kavling 507, Fajar Graha Pena Tower, Jl. Urip Sumohardjo No.20, Makassar, Indonesia 90234

Copyright © 2018 The Asian Institute of Research. All rights reserved