The Correlation between Corporate Governance and Financial Performances in the Romanian Banks

Alina Georgiana Manta (), Roxana Maria Bădîrcea () and Ramona Pîrvu ()
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Alina Georgiana Manta: University of Craiova
Roxana Maria Bădîrcea: University of Craiova
Ramona Pîrvu: University of Craiova

A chapter in Current Issues in Corporate Social Responsibility, 2018, pp 165-182 from Springer

Abstract: Abstract This study examines the impact of corporate governance on the financial performances of the banks. For this purpose, we compiled a database including 23 commercial banks in Romania. Starting from a vast reference literature there were identified three characteristics of the board (dimension, the structure from the point of view of the womenWomen and of the non-residentsNon-residents ) which might have an impact on the financial performance and these characteristics were used as independent variablesIndependent variables . The Ordinary Least Squares (OLS) regression from Eviews was used to estimate the relationship between bank performance measures and the independent variables. After the empiric testing, the hypotheses considered within the theoretical section were accepted. Within the first econometric model, the size of the board represented by the supervisory boardSupervisory board and the executive boardExecutive board determined a positive and significant impact on the performance. One showed that a numerous board contributes to the increase of the financial value of the considered banks because it assures an efficient supervisory. The second considered model enforced the results provided by the first model, so that the structure of the board Board structure determines a positive effect on the performance by means of the non-resident members (the conflicts of interestInterest are reduced) and the presence womenWomen in managementManagement (new ideas and approaches).

Keywords: Corporate Governance; Romanian Bank; Independent variablesIndependent Variables; Supervisory boardSupervisory Board; womenWomen (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:csrchp:978-3-319-70449-4_11

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DOI: 10.1007/978-3-319-70449-4_11

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