Other people’s money: The profit performance of Bangladeshi family dominated banks

Tasmina Mahbub, Kent Matthews and Kate Barker

Journal of Behavioral and Experimental Finance, 2019, vol. 21, issue C, 103-112

Abstract: Studies in developed economies show that family-owned non-financial firms outperform others, explained by agency theory and protection of family capital. Findings in emerging economies are equivocal, while studies of family domination and banks’ performance are scant. This paper examines the profit-performance of family-dominated banks in Bangladesh under competing hypotheses of bank-market structure. Using panel estimation, we model the profit-performance of banks and show that the principal drivers are costs, efficiency and non-performing loans. Family-dominated banks are less efficient and less profitable. The sources of weaker performance are higher non-performing loans and higher costs, with indirect evidence of poor corporate governance.

Keywords: Bangladesh banking market; Profit performance; Family dominated banks; Corporate governance (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:21:y:2019:i:c:p:103-112

DOI: 10.1016/j.jbef.2018.11.005

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