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Corporate governance mechanisms and their effect on financial performance in Islamic banks

Salkovic, D. (2022) Corporate governance mechanisms and their effect on financial performance in Islamic banks.

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Abstract:Several researchers indicate that good corporate governance can lead to better firm performance and bank performance. This study investigates if the effect of different corporate governance mechanisms also holds on financial bank performance in Islamic countries. In more detail, it was investigated if ownership structure (Ownership Concentration and Foreign Ownership) and board structure (Shariah Supervisory Board Size and Size of Board of Directors) have a significant effect on Return on Equity (ROE) and Return on Assets (ROA). An ordinary least squares (OLS) regression is conducted analyzing a sample of 37 Islamic banks from different Islamic countries. Overall, the results find no consistent evidence that these corporate governance mechanisms lead to better financial bank performance. However, some other interesting findings emerged in the robustness tests of this study which need further research to assess the reliability and validity of these results. There is not much research on corporate governance mechanisms and their effect on bank performance in Islamic countries. This study tries to contribute to this research and motivate to further research to explore the Islamic financial world which is growing consistently and gathering more and more attention.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:https://purl.utwente.nl/essays/92827
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