Governance and performance of Tunisian banks

Mohamed Ali Trabelsi

MPRA Paper from University Library of Munich, Germany

Abstract: Developing banking standards is an important process for a country’s financial and economic well being. Their importance incites governments to insure the stability and the good performance of their banking systems. Accordingly, several researchers pay a particular attention to banking governance. Specifically, shareholders-managers’ convergence of interests and the possible repercussions of these on the performance of banks can be avoided only by implementing a solid system of governance. The main purpose of this article is to determine the impact of governance on the performance of banks, through an empirical study of a sample of 10 Tunisian banks during the period 1997-2007. Our empirical investigation shows a positive association between external administrators and performance. It is worth noting that a high number of administrators results in a negative effect on performance. The results also reveal that managers lack control while the board of directors seems to exert a lot of power. This state of affairs results from the fact of associating the role of the manager with that of the board of directors. Finally, our results reveal a negative association between the presence of a group of dominant shareholders and performance, a phenomenon which might be explained in terms of private appropriation of benefits.

Keywords: Banks; Corporate governance; Board of directors; Ownership structure; Performance; Shareholders; Managers. (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2009, Revised 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in International Journal of Economics and Finance 3.2(2010): pp. 189-198

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https://mpra.ub.uni-muenchen.de/76918/9/MPRA_paper_76918.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/80322/8/MPRA_paper_80322.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/76955/11/MPRA_paper_76955.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/80204/11/MPRA_paper_76955.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/76924/11/MPRA_paper_76924.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/80323/11/MPRA_paper_76924.pdf revised version (application/pdf)

Related works:
Working Paper: Governance and Performance of Tunisian banks (2010)
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