Corporate governance quality, corporate life cycle and investor confidence in commercial banks: Evidence from Nigeria
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Author(s)Tajudeen John AyoolaLink to ORCID Index: https://orcid.org/0000-0001-8133-7294
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Omoneye Olufunke OlasanmiLink to ORCID Index: https://orcid.org/0000-0003-1719-0560
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Eghosa Godwin InnehLink to ORCID Index: https://orcid.org/0000-0003-4636-9869
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Adebukola Olubunmi AyoolaLink to ORCID Index: https://orcid.org/0000-0002-6006-2495
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Christian EhiobucheLink to ORCID Index: https://orcid.org/0000-0002-5026-7534
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DOIhttp://dx.doi.org/10.21511/bbs.18(3).2023.12
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Article InfoVolume 18 2023, Issue #3, pp. 136-146
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- 391 Views
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190 Downloads
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Creative Commons Attribution 4.0 International License
A dominant strand of literature advances a positive association between corporate governance quality and investor confidence. However, the corporate life cycle may influence the relationship. Therefore, this study investigated the moderating role of the corporate life cycle in the association between corporate governance quality and investor confidence in the Nigerian banking industry. Corporate governance quality was proxied using a composite measure of board characteristics comprising board size, board meeting, independence, and board gender diversity, while investor confidence was proxied using the price-earnings ratio. Secondary data were obtained from the audited annual financial statements of 12 banks from 2006 to 2021. The study adopted a pooled regression model based on the results of Hausman, and the Breusch and Pagan Lagrangian multiplier test. The results showed that corporate governance quality positively and significantly impacted investor confidence at the introduction (coef = .318, p = 0.017) and decline (coef = 383, p = 0.011) phases of the life cycle. Banks at the introduction and decline phases of the life cycle were characterized by a narrow resource base, low profitability, and higher risky investments sufficient to attract investor confidence. The study concludes that corporate governance quality enhanced investor confidence at the introduction and decline phases of the banks’ life cycle.
- Keywords
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JEL Classification (Paper profile tab)C23, G21, G34
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References55
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Tables6
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Figures0
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- Table 1. Definitions of variables of the study
- Table 2. Descriptive statistics
- Table 3. Correlation matrix
- Table 4. Diagnostic tests
- Table 5. Regression results of the interaction effect of the corporate life cycle and corporate governance quality on investor confidence
- Table 6. Pairwise comparisons of average marginal effects
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Patrick Velte
doi: http://dx.doi.org/10.21511/ppm.15(2).2017.02
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Evaluating the nationalization & privatization effect: a case of Indian banking industry
Manju Rajan Babu ,
Ashok Kumar M.
doi: http://dx.doi.org/10.21511/bbs.13(1).2018.02
Banks and Bank Systems Volume 13, 2018 Issue #1 pp. 11-21 Views: 2901 Downloads: 409 TO CITE АНОТАЦІЯThe facilitation of economic transactions and friendly investor environment is undertaken through effective performance of financial systems. Mobilization of savings and funding the profitable business opportunities are essential in improving the efficiency of intermediation. The study aims to evaluate the effects of nationalization and privatization on Indian banks. Various factors have been considered to examine the effects of privatization and nationalization, including sources of public sector inefficiency, measures of firm performance, econometric issues, and the mode of privatization. The data was collected for the period of 1998 to 2016 from Indian banks. Data Envelopment Analysis (DEA) was used to evaluate the financial reports of the banks selected to evaluate the efficiency of input and output variables. Positive results were observed, concerning the efficiency and profitability of banking industry after banks’ privatization. Performance of private banks has been observed effective and efficient as compared to the public sector banks. Privatization of banks must be increased and maintained to sustain the efficiency of the banks and implement strategies to maintain the assets. Future studies may recruit more appropriate sample size to evaluate the privatization and nationalization effects of Indian banking industry. Greater number of banks will provide more precise results, using data envelopment analysis.
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ERP implementation in banks: success factors & impact on financial performance
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