IJSSER

Title: EMPIRICAL EVIDENCE ON THE RELATION BETWEEN CORPORATE GOVERNANCE AND THE PERFORMANCE OF CREDIT INSTITUTIONS FROM CENTRAL AND EASTERN EUROPE
Authors: Stefania Raluca Micu
\|\| \|\|
Stefania Raluca Micu Bucharest University of Economic Studies, Romania
MLA 8 Micu, Stefania Raluca. "EMPIRICAL EVIDENCE ON THE RELATION BETWEEN CORPORATE GOVERNANCE AND THE PERFORMANCE OF CREDIT INSTITUTIONS FROM CENTRAL AND EASTERN EUROPE." Int. j. of Social Science and Economic Research, vol. 7, no. 4, Apr. 2022, pp. 974-1005, doi.org/10.46609/IJSSER.2022.v07i04.011. Accessed Apr. 2022. APA 6 Micu, S. (2022, April). EMPIRICAL EVIDENCE ON THE RELATION BETWEEN CORPORATE GOVERNANCE AND THE PERFORMANCE OF CREDIT INSTITUTIONS FROM CENTRAL AND EASTERN EUROPE. Int. j. of Social Science and Economic Research, 7(4), 974-1005. Retrieved from doi.org/10.46609/IJSSER.2022.v07i04.011 Chicago Micu, Stefania Raluca. "EMPIRICAL EVIDENCE ON THE RELATION BETWEEN CORPORATE GOVERNANCE AND THE PERFORMANCE OF CREDIT INSTITUTIONS FROM CENTRAL AND EASTERN EUROPE." Int. j. of Social Science and Economic Research 7, no. 4 (April 2022), 974-1005. Accessed April, 2022. doi.org/10.46609/IJSSER.2022.v07i04.011.
References [1]. Andrés Pablo Alonso, Vallelado Eleuterio (2008) - Corporate governance in banking: The role of the board of directors; Journal of banking and finance, vol. 32, issue 12, 2570-2580; [2]. Álvarez-Gallego Isabel, Sánchez-García Isabel María, Dominguez-Rodríguez Luis (2010) - The influence of gender diversity on corporate performance; Revista de contabilidad, vol 13, issue 1, 53-88; [3]. Al-ahdala M. Waleed, Alsamhib H. Mohammed, Tabashc I. Mosab, Farhand H.S. Najib (2019) - The impact of corporate governance on financial performance of Indian and GCC listed firms: an empirical investigation; International business and finance, vol 51, 2560-2570; [4]. Arellano Manuel, Bond Stephen (1991) - Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations; Review of economic studies, vol. 58, issue 2, 277-297; [5]. Bauer Rob, Otten Rogér (2003) - Empirical evidence on corporate governance in Europe: the effect on stock returns, firm value and performance; Journal of asset management, vol 5, 24-52; [6]. Beltratti Andrea, Stulz René (2012) - The credit crisis around the globe: why did some banks perform better?; Journal of financial economics, vol 105, issue 1, 1-17; [7]. Black Bernard, Jang Hasung, Woochan Kim (2006). Predicting firms' corporate governance choices: evidence from Korea; Journal of corporate finance, vol 12, issue 3, 660-691; [8]. Brunnermeier Markus (2009) - Financial crisis report for financial crisis; Inquire Commission - Princeton University; [9]. Cornett Marcia Millon, McNutt, Jamie John, Tehranian (2009) - Corporate governance and earnings management at large U.S. bank holding companies. Journal of corporate finance, vol 15, 412-430; [10]. De Andres Pablo, Azofra Valentin, Lopez Felix (2005) - Corporate boards in some OECD countries: size, composition, committee structure and efectiveness; Journal of finance, vol 13, issue 2, 197-210; [11]. Dedu Vasile ?i Chi?an Gheorghe (2013) - The influence of internal corporate governance on bank performance - an empirical analysis for Romania; Procedia - social and behavioral sciences, vol 99, 1114-1123; [12]. DeFond L. Mark, Lennox S. Clive, (2011) - The effect of SOX on small auditor exits and audit quality; Journal of accountability and economics, vol 52, 21–40; [13]. Erkens H.David, Hung Mingyi, Matos Pedro - Corporate governance in the 2007–2008 financial crisis: evidence from financial institutions worldwide; Journal of corporate finance, vol 18, issue 2, 389-411; [14]. Erhardt L. Niclas, Werbel D. James, Shrader B. Charles (2003) - Board of director diversity and firm financial performance; Corporate governance an international review, vol 11, issue 2, 102-111; [15]. Hartaska Valentina, Mersland Roy (2012) - Which governance mechanisms promote efficiency in reaching poor clients? Evidence from rated microfinance institutions; European financial management, vol 18, issue 2, 218-239; [16]. Heidrick & Struggles (2007) - Corporate governance in Europe: raising the bar; report, Paris; [17]. Iqbal Sana, Nawaz Ahmad, Ehsan Sadaf (2018) - Financial performance and corporate governance in microfinance: evidence from Asia; Journal of asian economics, vol 16, issue C, 1-13; [18]. Jensen C. Michael (1976) - Theory of the firm: managerial behavior, agency costs, and ownership structure; Journal of financial economics, vol 3, issue 4, 305-360; [19]. Laeven Luc, Caprio Gerard, Levine Ross (2007) - Governance and bank valuation. Journal of financial intermediation, vol 16, 584-617; [20]. Morgan Donald (2002) - Summit on financial markets and the world economy, Washington; [21]. Mertzanis Charilaos, Basuony Mohamed, Mohamed Ehab K.A. (2018) - Social institutions, corporate governance and firm-performance in the MENA region; Research in international business and finance, vol 48, issue C, 75-96; [22]. Nongnit Chancharat, Chaiporn Vithessonthi (2017) - Corporate governance, capital structure and firm performance: evidence from Thailand; Research in international business and finance, vol 42, issue C, 689-709; [23]. Pantea Marius, Gligor Delia, Cecilia Anis (2014) - Economic determinants of Romanian firms’ financial performance; Procedia - social and behavioral sciences, vol 124, 272 – 281; [24]. Rezaee Zabihollah (2008) - Corporate governance and ethics; Hoboken, NJ: John Wiley & Sons; [25]. Strøm R. Øystein., D’Espallier Bert, Mersland Roy (2014) - Female leadership, performance, and governance in microfinance institutions; Journal of banking and finance, vol 42, 60-75; [26]. Switzer N. Lorne, Tu Qiao, Wang Jun (2017) - Corporate governance and default risk in financial firms over the post-financial crisis period: international evidence; Journal of international financial markets, institutions & money, vol 52, issue C, 196-210; [27]. Taylor B. John (2009) - The financial crisis and the policy responses an empirical analysis of what went wrong, Journal of politics and society, vol 21, issue 2-3, 120-138; [28]. Torres-Reyna Oscar (2007) - Panel data analysis, fixed and random effects (using stata 10.x), Princeton University; [29]. Zagorchev Andrey, Gao Lei (2015) - Corporate governance and performance of financial institutions; Journal of economics and business, vol 82, issue C, 17-41.
ABSTRACT: Good corporate governance is considered an important element for financial institutions, as it is supposed to help them achieve their financial and social objectives, while also being an effective tool for regulators and supervisors. The paper analyses the relationship between corporate governance and the performance of credit institutions in Central and Eastern Europe, using a panel data set on 29 credit institutions from 9 countries (Romania, Austria, Hungary, Bulgaria, Czech Republic, Poland, Croatia, Slovakia and Slovenia), for the period 2010-2019. The study focused on the link between the governance elements related to the management structure and the internal control mechanisms of credit institutions and their performance measured by the return on assets and capital. The results obtained showed a positive relationship between the size of the audit committee, respectively the number of non-executive committees and the performance of credit institutions, thus showing that the existence of adequate internal control mechanisms contributes to a better performance of financial institutions. The results also support previous theories about the negative relation between board size and performance, highlighting the need for governance structures that allow for good communication and coordination for decision-making and increasing the performance of financial institutions. The research findings are important for both shareholders and supervisors, as the way banks perform affects economic progress and has important implications for society. The study complement the academic literature with information on the Eastern and Central European banking sector and the importance of the corporate governance for the financial markets.

IJSSER is Member of