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CEO ownership, corporate control, and bank performance

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  • John Griffith
  • Lawrence Fogelberg
  • H. Weeks

Abstract

This study examines the relation between CEO ownership and bank performance. In contrast to Pi and Timme (1993), we find that, when economic measures of performance are used, the relation between ownership and the performance of commerical banks is nonlinear. Additionally, in contrast to previous studies, we find the question of whether or not the CEO also holds the title of chairman of the board has an insignificant impact on bank performance. We conclude that, in commercial banks, management entrenchment may offset the effects predicted by Jensen and Meckling's (1976) convergence-of-interest hypothesis. Copyright Springer 2002

Suggested Citation

  • John Griffith & Lawrence Fogelberg & H. Weeks, 2002. "CEO ownership, corporate control, and bank performance," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 26(2), pages 170-183, June.
    • Handle: RePEc:spr:jecfin:v:26:y:2002:i:2:p:170-183
    DOI: 10.1007/BF02755984
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    1. Jalal D. Akhavein & Allen N. Berger & David B. Humphrey, "undated". "The Effects of Megamergers on Efficiency and Prices: Evidence from a Bank Profit Function," Finance and Economics Discussion Series 1997-09, Board of Governors of the Federal Reserve System (U.S.), revised 10 Dec 2019.
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    6. Resti, Andrea, 1998. "Regulation Can Foster Mergers, Can Mergers Foster Efficiency? The Italian Case," Journal of Economics and Business, Elsevier, vol. 50(2), pages 157-169, March.
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    Cited by:

    1. Neeraj Gupta & Jitendra Mahakud, 2020. "CEO characteristics and bank performance: evidence from India," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 35(8), pages 1057-1093, August.
    2. Maria-Eleni K. Agoraki & Manthos D. Delis & Panagiotis K. Staikouras, 2010. "The effect of board size and composition on bank efficiency," International Journal of Banking, Accounting and Finance, Inderscience Enterprises Ltd, vol. 2(4), pages 357-386.
    3. Maria Semenova & Polina Savchenko, 2015. "Sitting on the fence: does having a 'dual-director' add to bank profitability?," Applied Economics Letters, Taylor & Francis Journals, vol. 22(8), pages 654-657, May.
    4. Hasan, Iftekhar & Jackowicz, Krzysztof & Kowalewski, Oskar & Kozłowski, Łukasz, 2023. "Cultural values of parent bank board members and lending by foreign subsidiaries: The moderating role of personal traits," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).
    5. Adrian C. H. Lei & Frank M. Song, 2012. "Board structure, corporate governance and firm value: evidence from Hong Kong," Applied Financial Economics, Taylor & Francis Journals, vol. 22(15), pages 1289-1303, August.
    6. Amina Zgarni, 2018. "Board of Directors, Ownership Structure, Regulation and Bank Performance: What Can Change After the Financial Crisis," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 161-174.
    7. Engel, Dirk, 2002. "Zur Rolle von Beteiligungskapitalgebern in ihren Portfoliounternehmen: Eine ökonometrische Analyse," ZEW Discussion Papers 02-58, ZEW - Leibniz Centre for European Economic Research.
    8. Hsiang-Hsi Liu & Tser-Yieth Chen & Lin-Yen Pai, 2007. "The Influence of Merger and Acquisition Activities on Corporate Performance in the Taiwanese Telecommunications Industry," The Service Industries Journal, Taylor & Francis Journals, vol. 27(8), pages 1041-1051, December.
    9. Webb Cooper, Elizabeth, 2009. "Monitoring and governance of private banks," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(2), pages 253-264, May.
    10. Aymen Mselmi & Boutheina Regaieg, 2017. "Banking Institutions Governance and Stock Market and Financial Performance," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 752-759.
    11. Fang, Hao & Lee, Jen-Sin & Chung, Chien-Ping & Lee, Yen-Hsien & Wang, Wen-Hao, 2020. "Effect of CEO power and board strength on bank performance in China," Journal of Asian Economics, Elsevier, vol. 69(C).
    12. Nesrine Djebali & Khemais Zaghdoudi, 2020. "Testing the governance-performance relationship for the Tunisian banks: a GMM in system analysis," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-24, December.

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