Ownership Structure as One of the Corporate Governance Tools and Banking Risks

Othman Hel Al-Dhaimesh

International Journal of Economics & Business Administration (IJEBA), 2020, vol. VIII, issue 4, 60-69

Abstract: Purpose: The current study aimed to test the effect of the ownership structure on banking risks of banks operating in the State of Qatar over the period (2008-2018). Design/Methodology/Approach: To measure the quality of the ownership structure and its effect on banking risks, special indicators were developed regarding the ownership concentration, government ownership, institutional ownership, and foreign ownership. The study used the contents analysis technique by deep study of financial and corporate governance reports published by the study sample as the main source data. To test this effect, the multiple linear regression models were designed using the OLS method. Findings: The study found that the banks operating in the state of Qatar have good ownership structures, which is reflected positively in reducing banking risks. Especially, the study found out that banks with high governance ownership proportion have low liquidity and credit risks. The study also found that banks with shareholders owning 5% or more have low liquidity and credit risks. Also, the existance of a high proportion of foreign investors decreases liquidity risks, while the increase in the share of foreign investors increases the credit risks. The study also found any increase in institutional ownership proportion in the bank leads to an increase in credit risk, while there is no effect of institutional ownership on bank liquidity risks. Originality/Value: The current study examines the ownership structure as one of the mechanisms of corporate governance, and the extent of its effect on reducing banking risks of the banks operating in the state of Qatar, which is considered one of the most important sectors affecting the economy.

Keywords: Corporate Governance; ownership structure; liquidity risks; credit risks. (search for similar items in EconPapers)
JEL-codes: M38 M41 M48 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ers:ijebaa:v:viii:y:2020:i:4:p:60-69

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