Does Corporate Governance Have an Effect on Performance in the European Banking Sector? Evidence from a Crisis Environment

Anastasia Stepanova () and Olga Ivantsova ()
Additional contact information
Olga Ivantsova: Corporate Finance Department, Corporate Finance Center, National Research University Higher School of Economics, Moscow, Russia

HSE Working papers from National Research University Higher School of Economics

Abstract: After the financial crisis, the necessity to support large inefficient banks had a crucial impact on a number of economies in Europe. This paper focuses on the effect that corporate governance mechanisms has on performance for commercial banks operating in developed and emerging European markets. We test a model of market-based bank performance for a sample of 150 commercial banks from 27 European countries over a period from 2004 to 2011. As a result, we show that such governance mechanisms as ownership concentration, state ownership, board independence, and others do have a significant influence on bank performance. We also find significant differences between models for developed and emerging markets, as well as for different geographical regions. Studying the financial crisis provides us with evidence for structural movements in the relationship model between corporate governance and bank performance as a result of the 2008-2009 crisis. In general, the important determinants lose their significance after 2007. Though, due to the possible endogeneity problem in our models, we should be cautious when interpreting the causality of connections between factors.

Keywords: Corporate Governance; Bank Performance; Commercial Banks; Independent Directors; Ownership Structure; Financial Architecture; Emerging Markets (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in WP BRP Series: Financial Economics / FE, December 2012, pages 1-29

Downloads: (external link)
http://www.hse.ru/data/2012/12/29/1304099907/10FE2012.pdf (application/pdf)

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:hig:wpaper:10/fe/2012

Access Statistics for this paper

More papers in HSE Working papers from National Research University Higher School of Economics
Bibliographic data for series maintained by Shamil Abdulaev () and Shamil Abdulaev ().