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Corporate Governance, Cash Flows, and Bank Performance: Developed and Developing Countries

Author

Listed:
  • Fatima Faruqi

    (Air University)

  • Tanveer Ahsan

    (ESC [Rennes] - ESC Rennes School of Business)

  • Sultan Sikandar Mirza

    (ZJSU - Zhejiang Gongshang University [Hangzhou])

  • Zia-Ur-Rehman Rao

    (Forman Christian College)

Abstract

The purpose of the study is to investigate the impact of corporate governance on bank performance and the mediating role of cash flows between corporate governance and bank performance in developed and developing countries. The study collects data for 2006-2015 for 30 commercial banks operating in five countries (Bangladesh, Malaysia, Pakistan, Australia, and the USA) and applies bank, time (year), and country fixed effects regression analysis to determine the direct impact of corporate governance and cash flows on bank performance. Structural equation modeling is employed to investigate the mediating role of cash flows between corporate governance and bank performance. The results suggest that the impact of corporate governance on bank performance is more significant in developed countries than in developing countries. The results also show that investment cash flows mediate the relationship between corporate governance and bank performance in developed as well as developing countries, while operating cash flows mediate the relationship between bank performance and corporate governance in developing countries only.

Suggested Citation

  • Fatima Faruqi & Tanveer Ahsan & Sultan Sikandar Mirza & Zia-Ur-Rehman Rao, 2019. "Corporate Governance, Cash Flows, and Bank Performance: Developed and Developing Countries," Post-Print hal-02332028, HAL.
  • Handle: RePEc:hal:journl:hal-02332028
    as

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