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Importance of Corporate Governance: Evidence from Kosovo’s Banking Sector

Author

Listed:
  • Esat A. Durguti

    (Faculty of Economics, University Isa Boletini, Kosovo)

  • Nexhat Kryeziu

    (Faculty of Management, Business and Economics, University for Business and Technology, Kosovo)

Abstract

This study identifies and assesses the impact and effect of corporate governance (CG), as a good practice mechanism, as well as some specific financial indicators on the performance of the banking sector in Kosovo. The data used in the research are defined as secondary data that include nine (9) commercial banks and cover the period 2013–2020. The analysis applied to data processing is the dynamic approach through 2SLS estimation for the dependent variables ROA, ROE, and NIM. The results obtained at the end of the study show that all variables applied in this research, depending on the variable defined for evaluation, have a significant impact on the performance of the banking sector. The results also show that the most adequate measure for assessing a bank’s performance is the net interest margin (NIM). This research paves the way for debate and discussion on the governing structures of financial institutions and policymakers.

Suggested Citation

  • Esat A. Durguti & Nexhat Kryeziu, 2021. "Importance of Corporate Governance: Evidence from Kosovo’s Banking Sector," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 23(2), pages 5-32, December.
    • Handle: RePEc:iez:survey:ces-v23_2-2021_durguti-kryeziu
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    References listed on IDEAS

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    More about this item

    Keywords

    bank’s profitability; corporate governance; 2SLS;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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