Corporate Governance, Bank Stability and Risk-Taking: Differences Between Conventional and Islamic Banks

El Mokdad Ghaithaa and Ali Awdeh ()
Additional contact information
El Mokdad Ghaithaa: Arab Open University – Lebanon, Beirut, Lebanon

Review of Middle East Economics and Finance, 2025, vol. 21, issue 1, 1-41

Abstract: This study aims to detect the impact of the corporate governance structures on MENA banks’ stability and risk-taking. In particular, it aims at considering if bank type (conventional or Islamic) is a major determinant of the relationship between corporate governance, bank stability and risk-taking. The research adopts panel data econometrics on a sample containing the largest 100 MENA banks operating between 2011 and 2021. The empirical estimations examine the impact of board size, board independence, board gender diversity, role duality, the existence of risk, governance and nomination and remuneration committees as well as ownership blockholdings, on bank Z-scores and NPL ratios. The empirical results show that the exploited variables impact conventional and Islamic banks stability and risk differently. For instance, a larger board size has a positive effect on conventional bank stability, while it is irrelevant for Islamic banks. For role duality, the opposite findings have been observed. The risk committee plays an important role in Islamic banks risk mitigation, unlike the case of conventional banks. Finally, the existence of blockholdings poses considerable risk for conventional banks only.

Keywords: corporate governance; bank stability; bank risk-taking; MENA region (search for similar items in EconPapers)
JEL-codes: G21 G28 G32 G34 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/rmeef-2024-0034 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:rmeecf:v:21:y:2025:i:1:p:1-41:n:1004

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/rmeef/html

DOI: 10.1515/rmeef-2024-0034

Access Statistics for this article

Review of Middle East Economics and Finance is currently edited by Ghassan Dibeh

More articles in Review of Middle East Economics and Finance from De Gruyter
Bibliographic data for series maintained by Peter Golla ().