Corporate governance and default probability: The moderating role of bank’s efficiency
AbstractThere is a need to explore the moderating role of banks’ efficiency in the relationship between corporate governance (CG) and default probability in Pakistan. Such attention is required due to poor bank governance, which threatens banks’ stability. This empirical study’s objective is to asce...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2023-10-01
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| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2023.2266318 |
| _version_ | 1827794275348250624 |
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| author | Saif Ullah Haitham Nobanee M. Ali Kemal |
| author_facet | Saif Ullah Haitham Nobanee M. Ali Kemal |
| author_sort | Saif Ullah |
| collection | DOAJ |
| description | AbstractThere is a need to explore the moderating role of banks’ efficiency in the relationship between corporate governance (CG) and default probability in Pakistan. Such attention is required due to poor bank governance, which threatens banks’ stability. This empirical study’s objective is to ascertain the impact of CG on bank default probability by considering banking efficiency as a moderating factor for the period spanning 2012–2020 by using secondary data from banks in Pakistan. The results, estimated using System GMM regression—whose robustness was confirmed through Driscoll and Kraay’s standard error approach findings—show a significant relationship between banks’ CG and bank efficiency. Banks’ better CG practices will improve bank efficiency toward financial soundness in Pakistan. Moreover, the current study puts forth certain implications, i.e. that the banks still need to improve the mechanism they use to implement corporate governance attributes to compete properly on the international stage. |
| first_indexed | 2024-03-11T18:30:23Z |
| format | Article |
| id | doaj.art-d713d4168c84450b8b4d7e0f526b5bea |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-03-11T18:30:23Z |
| publishDate | 2023-10-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-d713d4168c84450b8b4d7e0f526b5bea2023-10-13T12:26:20ZengTaylor & Francis GroupCogent Economics & Finance2332-20392023-10-0111210.1080/23322039.2023.2266318Corporate governance and default probability: The moderating role of bank’s efficiencySaif Ullah0Haitham Nobanee1M. Ali Kemal2Department of Management, Technology, and Information Science, Ziauddin University, Karachi, PakistanCollege of Business, Abu Dhabi University, Abu Dhabi, UAEMinistry of Planning Development and Special Initiatives, Islamabad; Pakistan Institute of Development Economics, Islamabad, PakistanAbstractThere is a need to explore the moderating role of banks’ efficiency in the relationship between corporate governance (CG) and default probability in Pakistan. Such attention is required due to poor bank governance, which threatens banks’ stability. This empirical study’s objective is to ascertain the impact of CG on bank default probability by considering banking efficiency as a moderating factor for the period spanning 2012–2020 by using secondary data from banks in Pakistan. The results, estimated using System GMM regression—whose robustness was confirmed through Driscoll and Kraay’s standard error approach findings—show a significant relationship between banks’ CG and bank efficiency. Banks’ better CG practices will improve bank efficiency toward financial soundness in Pakistan. Moreover, the current study puts forth certain implications, i.e. that the banks still need to improve the mechanism they use to implement corporate governance attributes to compete properly on the international stage.https://www.tandfonline.com/doi/10.1080/23322039.2023.2266318corporate governancebanks’ efficiencyprofitabilityZ-Scorebank riskpooled OLS |
| spellingShingle | Saif Ullah Haitham Nobanee M. Ali Kemal Corporate governance and default probability: The moderating role of bank’s efficiency Cogent Economics & Finance corporate governance banks’ efficiency profitability Z-Score bank risk pooled OLS |
| title | Corporate governance and default probability: The moderating role of bank’s efficiency |
| title_full | Corporate governance and default probability: The moderating role of bank’s efficiency |
| title_fullStr | Corporate governance and default probability: The moderating role of bank’s efficiency |
| title_full_unstemmed | Corporate governance and default probability: The moderating role of bank’s efficiency |
| title_short | Corporate governance and default probability: The moderating role of bank’s efficiency |
| title_sort | corporate governance and default probability the moderating role of bank s efficiency |
| topic | corporate governance banks’ efficiency profitability Z-Score bank risk pooled OLS |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2023.2266318 |
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