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Do family ownership and control influence banks performance and risk-taking? A cross-country analysis of emerging economies

Do family ownership and control influence banks performance and risk-taking? A cross-country analysis of emerging economies
Do family ownership and control influence banks performance and risk-taking? A cross-country analysis of emerging economies
This study examines how family ownership and family-aligned board and management as well as government and foreign shareholdings influence profitability, valuation, and credit risk of banks in emerging economies. It is based on fixed effect regressions to analyse an unbalanced panel dataset on 546 bank-year observations from Turkey, Egypt, Jordan, Malaysia, and Indonesia covering a period of 7 years (2009-2015). Overall, the estimation results suggest that family ownership and family-aligned board and management are positively associated with bank performance and negatively associated with credit risk. In addition, ownership concentration has an inverse relationship with bank profitability and valuation. Moreover, foreign ownership and government shareholding show a positive association with bank performance and a negative association with credit risk. Altogether, the study results are consistent with the arguments of stewardship theory and resource-based view. The estimation results have policy implications for corporate governance reform in relation to family ownership and control as well as government and foreign ownerships in concentrated banking systems in emerging economies.
Family ownership, family-aligned board and management, ownership concentration, government and foreign shareholdings, bank profitability and valuation, bank risk-taking, emerging economies
2399-5025
Hanif, Tanzeela
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Haque, Faizul
8153d83c-427a-4f73-860d-dd7e9460533d
Hanif, Tanzeela
f5dfadfd-db76-4519-9343-cd8a2eb3827b
Haque, Faizul
8153d83c-427a-4f73-860d-dd7e9460533d

Hanif, Tanzeela and Haque, Faizul (2021) Do family ownership and control influence banks performance and risk-taking? A cross-country analysis of emerging economies. International Journal of Governance and Financial Intermediation. (In Press)

Record type: Article

Abstract

This study examines how family ownership and family-aligned board and management as well as government and foreign shareholdings influence profitability, valuation, and credit risk of banks in emerging economies. It is based on fixed effect regressions to analyse an unbalanced panel dataset on 546 bank-year observations from Turkey, Egypt, Jordan, Malaysia, and Indonesia covering a period of 7 years (2009-2015). Overall, the estimation results suggest that family ownership and family-aligned board and management are positively associated with bank performance and negatively associated with credit risk. In addition, ownership concentration has an inverse relationship with bank profitability and valuation. Moreover, foreign ownership and government shareholding show a positive association with bank performance and a negative association with credit risk. Altogether, the study results are consistent with the arguments of stewardship theory and resource-based view. The estimation results have policy implications for corporate governance reform in relation to family ownership and control as well as government and foreign ownerships in concentrated banking systems in emerging economies.

Text
IJGFI_Family Ownership & Control and Bank Performance_AAM - Accepted Manuscript
Restricted to Repository staff only until 11 July 2022.
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More information

Accepted/In Press date: 11 June 2021
Keywords: Family ownership, family-aligned board and management, ownership concentration, government and foreign shareholdings, bank profitability and valuation, bank risk-taking, emerging economies

Identifiers

Local EPrints ID: 452054
URI: http://eprints.soton.ac.uk/id/eprint/452054
ISSN: 2399-5025
PURE UUID: cca10198-049e-4b34-a867-c9473cf10d4b
ORCID for Faizul Haque: ORCID iD orcid.org/0000-0003-1556-3466

Catalogue record

Date deposited: 10 Nov 2021 17:31
Last modified: 13 Dec 2021 03:41

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Contributors

Author: Tanzeela Hanif
Author: Faizul Haque ORCID iD

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