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Analysis of Corporate Governance and Bank Performance: Empirical Evidence From Malaysian Banking Industry

Author

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  • Nazaria Md Aris
  • Suzila Mohamed Yusof
  • Lim Jia Wen

Abstract

Various theories and empirical studies have been applied and proposed to establish and explain how corporate governance practices are related to banks financial performance. This study concerns the relationship between corporate governance variables and bank performance in Malaysia. The data collected and analysed in this research is from quarter one year 2011 to quarter four year 2016. Various determinants have been identified namely return on equity(ROE) for bank performance measurement, CEO duality, board size, and board gender for corporate governance. Control variables are bank size and bank leverage. The methodologies adopted in this research includes descriptive analysis, correlation analysis, Pooled Ordinary Least Square (OLS) regression, Diagnostic Tests (Jarque-Bera Normality Test, Wooldridge Test and Variance Inflation Factor), Breusch-Pagan (BP) Lagrange Multiplier test, and Hausman test. In this study, the findings indicate that strong board composition and bank leverage were experience better performance.

Suggested Citation

  • Nazaria Md Aris & Suzila Mohamed Yusof & Lim Jia Wen, 2019. "Analysis of Corporate Governance and Bank Performance: Empirical Evidence From Malaysian Banking Industry," Journal of Public Administration and Governance, Macrothink Institute, vol. 9(3), pages 82-99, December.
    • Handle: RePEc:mth:jpag88:v:9:y:2019:i:3:p:82-99
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    References listed on IDEAS

    as
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    4. Asish Saha & Nor Hayati Ahmad & Siew Goh Yeok, 2016. "Evaluation of Performance of Malaysian Banks in Risk Adjusted Return on Capital (RAROC) and Economic Value Added (EVA) Framework," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 12(1), pages 25-47.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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