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Impact of corporate governance mechanisms on financial performance, risk-taking and basel compliance of Islamic banks

Impact of corporate governance mechanisms on financial performance, risk-taking and basel compliance of Islamic banks
Impact of corporate governance mechanisms on financial performance, risk-taking and basel compliance of Islamic banks
The purpose of this study is to examine the effects of ownership concentration, board characteristics and Sharia governance financial performance, risk-taking behaviour and Basel compliance of Islamic banks. Our sample is based on 60 Islamic banks form the GCC and non-GCC countries covering a period of five years (2014-2018). We use descriptive statistics (e.g., mean and standard deviation), univariate (e.g., correlations and t-tests), multivariate (OLS regressions) techniques to analyse governance and financial data. We find that board size has a statistically negative association with profitability and valuation, and a positive association with risk-taking, asset quality and capital adequacy. In addition, board independence is found to be positively associated with valuation, asset quality and capital adequacy, and negatively associated with risk-taking behaviour. Among Sharia governance characteristics, Sharia board size shows a positive association and Sharia board expertise shows a negative association with risk-taking behaviour. Moreover, Sharia board interlocking shows positive relationship with profitability, valuation and risk-taking. Finally, we find ownership concentration to be positively associated to valuation and risk-taking behaviour of IBs.
Haque, Faizul
8153d83c-427a-4f73-860d-dd7e9460533d
Mendonca, Aloysha Maryann
95a5b820-6407-45b6-8ade-d73ebc074915
Haque, Faizul
8153d83c-427a-4f73-860d-dd7e9460533d
Mendonca, Aloysha Maryann
95a5b820-6407-45b6-8ade-d73ebc074915

Haque, Faizul and Mendonca, Aloysha Maryann (2020) Impact of corporate governance mechanisms on financial performance, risk-taking and basel compliance of Islamic banks. Fifth International Conference on Emerging Research Paradigms in Business and Social Sciences (ERPBSS) 2020., Middlesex University, Dubai, United Arab Emirates. 14 - 16 Jan 2020.

Record type: Conference or Workshop Item (Paper)

Abstract

The purpose of this study is to examine the effects of ownership concentration, board characteristics and Sharia governance financial performance, risk-taking behaviour and Basel compliance of Islamic banks. Our sample is based on 60 Islamic banks form the GCC and non-GCC countries covering a period of five years (2014-2018). We use descriptive statistics (e.g., mean and standard deviation), univariate (e.g., correlations and t-tests), multivariate (OLS regressions) techniques to analyse governance and financial data. We find that board size has a statistically negative association with profitability and valuation, and a positive association with risk-taking, asset quality and capital adequacy. In addition, board independence is found to be positively associated with valuation, asset quality and capital adequacy, and negatively associated with risk-taking behaviour. Among Sharia governance characteristics, Sharia board size shows a positive association and Sharia board expertise shows a negative association with risk-taking behaviour. Moreover, Sharia board interlocking shows positive relationship with profitability, valuation and risk-taking. Finally, we find ownership concentration to be positively associated to valuation and risk-taking behaviour of IBs.

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Corporate_Gov_Performance_Risk_taking_and_Basel_compliance_of_Islamic_banks - Accepted Manuscript
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More information

Published date: 16 January 2020
Venue - Dates: Fifth International Conference on Emerging Research Paradigms in Business and Social Sciences (ERPBSS) 2020., Middlesex University, Dubai, United Arab Emirates, 2020-01-14 - 2020-01-16

Identifiers

Local EPrints ID: 446532
URI: http://eprints.soton.ac.uk/id/eprint/446532
PURE UUID: b669a808-0434-46b9-9276-1a7593477ae1
ORCID for Faizul Haque: ORCID iD orcid.org/0000-0003-1556-3466

Catalogue record

Date deposited: 12 Feb 2021 17:31
Last modified: 17 Jul 2021 02:10

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Contributors

Author: Faizul Haque ORCID iD
Author: Aloysha Maryann Mendonca

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