Effect of board quality on the financial performance of conventional and Islamic banks: international comparative study after the Subprime crisis

IF 3.2 Q1 BUSINESS, FINANCE
Achraf Haddad
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Abstract

Purpose

The purpose of this research is to compare the board quality's (BQ) impacts on the financial performance (FP) of conventional and Islamic banks (IBs) after the Subprime financial crisis. The main reason is to help financial stakeholders choose the best performing and most appropriate bank type with its engagement based on the BQ index.

Design/methodology/approach

Based on the existing gap in previous researches and by using the GLS method (Generalized Least Squares method), the author compared the BQ's impacts on the FP of conventional and IBs. Settings of the FP and BQ were collected from 30 countries located on 4 continents. Two equal samples were tested; each of them is composed of 112 banks. The author concentrated only on the banks that have published regularly the banks' annual reports over the period 2010–2018.

Findings

Cylindrical panel results revealed that in conventional banks (CBs), the BQ has negatively affected banks' FP, while in IBs the BQ's impacts on the banks’' FP is ambiguous. Nevertheless, the positive impacts are more significant on the IBs' FP than the negative impacts on the IBs' FP.

Practical implications

The main practical contribution is the identification and distinction between the impacts of board determinants' quality on the shareholders' profits in the case of conventional and IBs. Hence, conventional or IBs which have a bad BQ will generate less FP and will be classified as a lender of bankruptcy danger for the bank customer. Besides, whatever the bank type, in a financial stable period, good BQ positively influences FP and provides a good impression to stakeholders. Otherwise, FP indicates that the banks suffer from the weaknesses of the board quality determinants.

Originality/value

Returning to the finance and banking governance literature, the author's article provides the first conditional and demonstrative analysis that detailed a logical comparative process to analyze the correlation between the board determinants' quality and the financial performance of conventional and IBs. However, previous research has always discussed the main role of the board as an internal governance mechanism on the FP separately in each bank type.

董事会质量对传统银行和伊斯兰银行财务绩效的影响:次贷危机后的国际比较研究
本研究的目的是比较次贷金融危机后传统银行和伊斯兰银行董事会质量(BQ)对财务绩效(FP)的影响。主要原因是帮助金融利益相关者根据BQ指数选择表现最佳和最合适的银行类型。设计/方法/途径基于前人研究的空白,采用广义最小二乘法(GLS)方法,比较了传统银行和ib银行的业务智商对FP的影响。FP和BQ的设置来自4大洲的30个国家。两个相等的样本进行测试;每个银行由112家银行组成。作者只关注了在2010-2018年期间定期发布年度报告的银行。圆柱形面板结果显示,在传统银行(CBs)中,BQ对银行的FP有负面影响,而在IBs中,BQ对银行FP的影响是模糊的。然而,积极的影响对中小企业生产率的影响比消极的影响更显著。主要的实际贡献是在常规和ib的情况下,识别和区分董事会决定因素的质量对股东利润的影响。因此,BQ不好的传统或ib将产生较少的FP,并将被归类为银行客户的破产危险贷款人。此外,无论银行类型如何,在金融稳定时期,良好的BQ会对FP产生积极影响,并给利益相关者留下良好的印象。否则,FP表明银行遭受董事会质量决定因素的弱点。回到金融和银行治理文献,作者的文章提供了第一个条件和示范分析,详细说明了一个逻辑比较过程,以分析董事会决定因素的质量与传统和IBs的财务绩效之间的相关性。然而,以往的研究总是分别讨论董事会作为一种内部治理机制对不同类型银行财务计划的主要作用。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
5.80
自引率
13.00%
发文量
38
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