MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY HO CHI MINH CITY PHAM HOANG AN IMPACTS OF CORPORATE GOVERNANCE ON RISKS AND FINANCIAL PERFORMANCE OF COMMERC
Trang 1MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM
BANKING UNIVERSITY HO CHI MINH CITY
PHAM HOANG AN
IMPACTS OF CORPORATE GOVERNANCE ON RISKS AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN VIETNAM
SUMMARY OF PHD THESIS
Major: Finance - Banking Code: 9.34.02.01
Scientific instructors: Dr NGUYEN VAN THUAN
Dr TRAN DUC THUC
HO CHI MINH CITY – 2020
Trang 2CHAPTER 1: OVERVIEW OF THE RESEARCH 1.1 Research issues and urgency
Corporate governance (CG) is a topic that has attracted a lot of attention from researchers and business managers around the world and especially the recent crisis of 2007-2009 has revealed some weak points in corporate governance mechanisms in different countries The crisis initially began in the financial sector in the United States (such as: Lehman Brothers and IndyMac), the UK (such as Northern Rock, Bradford and Bingley, Alliance and Leicester, HBOS and Royal Bank of Scotland) and other developed economies and led
to significant losses in financial institutions around the world for several months (Erkens et
al, 2012) Therefore, concern about good corporate governance is an urgent requirement, especially corporate governance in banks
Banking activities are always accompanied by risk acceptance and the level of bank risk can increase very quickly and easily Banks can conceal (in part) their true level of risk that
is not visible to any outside investor (Becht et al., 2012) Moreover, the bank’s corporate governance is different from the corporate governance of other companies as the bank’s related parties are not only shareholders but also depositors and managing bodies (Becht et al., 2012) Another special feature is that the ratio of equity in a bank’s total assets is often much lower than that of non-financial companies
Since 2011, foreign banks with strong financial resources and strong international experience have been given equal rights in all fields with domestic banks Market share in the banking and financial sector in Vietnam is becoming increasingly crowded with many business enterprises in the industry Keeping market share and growing business in a fiercely competitive environment is becoming more difficult than ever The key to leading the success of commercial banks can confidently stand and thrive in the context of fierce competition with foreign banks, Vietnamese commercial banks need to change their minds about modern banking management, with special emphasis on risk management and meeting international governance standards
Corporate governance (CG) is a topic that has always attained a lot of attention during the development of the economy Many large organizations such as OECD, World Bank have made great efforts to develop healthy and effective corporate governance principles For the banking and financial sector, due to the important and specific role of commercial banks (commercial banks) for the stability and sustainability of the entire economy, due to the boom of the financial crisis accompanying the weaknesses and failures in the operations of many commercial banks over the past time, corporate governance and risks
in commercial banks are becoming the top concern in many countries around the world, from developed countries with outstanding finance such as the United States, Europe, Japan until developing countries with new financial and banking markets which are at an early stage including Vietnam
Trang 3Internal corporate governance mechanisms are often responsible for developing and executing strategic decisions in most organizations The consequence of the crisis has been evaluated by the researchers and has a high consensus that it is related to the performance
of the Board of Directors and is considered as one of the main reasons for the crisis (De Andres and Vallelado, 2008; and Erkens et al, 2012) The Board of Directors is also held responsible for not protecting shareholders’ rights and focusing on short-term rather than long-term organizational goals (Erkens et al., 2012)
Recognizing the importance of the relationship between corporate governance, risk and financial performance of the bank, the Basel Committee on Banking Supervision has issued regulations to solve issues related to risk management and corporate governance in banks In 1988, Basel I was issued focusing on credit risk and bankruptcy risk In 2004, Basel II was issued guiding capital safety, risk management requirements and information disclosure And by the end of 2010, Basel III made many new proposals on capital, leverage and liquidity standards to strengthen the regulations, supervision and risk management of the banking sector
The Basel Committee on Banking Supervision (2010), points out that effective Corporate Governance practices are essential to building and maintaining public trust in the banking system These are essential elements for the healthy operation of the banking industry as well as the whole economy Weak corporate governance can lead to the collapse of banks, causing serious social and economic losses due to the negative effects on the deposit insurance system, as well as to impact large macroeconomic impacts, such as chain risks, adversely affect payment systems In addition, weak Corporate Governance can cause the market to lose confidence in the bank’s ability to effectively manage assets and liabilities, including deposit assets This can ignite a sudden withdrawal of deposits and lead to a solvency crisis of the bank In fact, in addition to responsibilities for shareholder, banks are also responsible for their depositors and other relevant stakeholders
The Corporate Governance rules of banks announced by the Basel Committee also specifically emphasize the role and importance of the Board of Directors The Board of Directors not only prevents ineffective management practices leading to business mistakes but also ensures that the bank always takes advantage of opportunities to add value to all stakeholders In addition, the Board of Directors affects the supervisory mechanism for senior managers, and also affects the appointment, dismissal, suspension and remuneration policies (BCBS, 2010)
In the scheme of restructuring the system of credit institutions (CIs) in the period of
2011-1015 and the period of 2016 - 2020, there is a proposal to restructure the banking governance system, including: increasing transparency in public disclosing information, changing the capital ownership ratio of commercial banks, improving the conditions and standards of management capacity, working experience and professional qualifications for leading and managing titles of credit institutions (Chairman of Board of Directors/Board of Members, General Director/Director, Members of Board of Directors/Board of
Trang 4Members, ) (Government, 2012, 2017) During this period, many banks have gradually improved their governance capacity towards international standards But through the event
on August 20, 2012 occurred at Asia Commercial Joint Stock Bank and most recently, especially at Ocean Commercial Joint Stock Bank, Construction Commercial Joint Stock Bank, Global Petroleum Commercial Joint Stock Bank and Dong A Commercial Joint Stock Bank made managers and the public is really worried about the personnel, management and performance of commercial banks
Stemming from the aforementioned issues, the author chooses the topic: “The impact of corporate governance on risks and financial performance of commercial banks in Vietnam” as his research topic
1.2 Objectives of the study
The overall objective of the thesis is to study the impact of corporate governance on risks and financial performance of commercial banks in Vietnam From the research results, the thesis will also discuss policy implications to improve corporate governance capacity, limit risks and improve the financial performance of commercial banks in Vietnam
To achieve the overall objective, the thesis respectively resolves three specific objectives
as follows:
- Objective 1: Testing the impact of corporate governance on the risks of commercial
banks in Vietnam
- Objective 2: Testing the impact of corporate governance on the financial performance of
commercial banks in Vietnam
- Objective 3: Proposing some policy implications to improve corporate governance
capacity, limit risks in order to improve the financial performance of commercial banks in Vietnam
- Question 2: What factors of corporate governance affect the financial performance of
commercial banks in Vietnam?
- Question 3: What policy implications can be applied to improve corporate governance
capacity, limit risks to improve the financial performance of commercial banks in Vietnam?
1.4 Object and scope of the study
Trang 51.4.1 Research subjects: The impact of corporate governance on risks and financial
performance of commercial banks in Vietnam
1.4.2 Research scope:
- In terms of space: Research of commercial banks in Vietnam
- In terms of time: The study focuses on the period from 2011 to 2017 Because in this period, Vietnamese commercial banks began to apply the Law on Credit Institutions in
2010, including many new regulations on organization, administration and management in accordance with international practices At the same time, in this period, Vietnamese commercial banks also performed a comprehensive restructuring of their operations, including restructuring the banking management system
- In terms of content: There are many ways to measure corporate governance such as corporate governance index or use of representative variables, so the scope of this study only uses variables that represent corporate governance to analyze the impact of corporate governance on the bank’s risk and financial performance
1.5 Research Methods
- To solve the set goals, the research uses the following research methods:
+ Building regression models to test and estimate the impact of corporate governance on the bank’s risk and financial performance Specifically, the research conducts to build econometric models based on the models of previous studies with appropriate adjustments
to study the impact of corporate governance on risks and financial performance of commercial banks in Vietnam
+ Researching to use the method of panel regression analysis with the methods (OLS, FEM, REM) to estimate the models In addition, the research also uses a number of methods to test for some hypothetical errors as well as ensure the correctness of the model used in the study
In addition, the research also uses SGMM (System Generalized Method of Moments) method to deal with endogenous problems (if any) in the research model
- Research data: Data used in this study are taken from annual reports, corporate governance reports, audited financial statements of 29 commercial banks in Vietnam, and World Economic Outlook (WEO) of the International Monetary Fund (IMF), General Statistics Office of Vietnam, 2011 - 2017
1.6 Achievements and new contributions of the topic
With the above research objectives and research methods, the results have shown that in the context of Vietnam, the results are: (i) the factors of corporate governance that impact
on bank risk, including: percentage of independent members of Board of Directors (Bindep), percentage of female members of Board of Directors (Femdir), percentage of foreign members of Board of Directors (Fordir), percentage of members of Board of
Trang 6Directors taking part in management (Execdir); (ii) factors of corporate governance affecting the financial performance of the bank, including: ratio of independent members
of Board of Directors (Bindep), percentage of female members of Board of Directors (Femdir), percentage of members of Board of Directors taking part in the management (Execdir), the education level of the Board of Directors (Edu)
As compared to the previous experimental studies, the thesis has some new contributions: + The thesis analyzes for the first time the impact of corporate governance on risks and financial performance on commercial banks in Vietnam
+ The thesis presents briefly and fully the theory of corporate governance about the risks and financial performance of banks This is the basis for arguing and developing experimental studies of previous authors into this thesis
+ The thesis has codified experimental studies analyzing the impact of corporate governance on bank risk and experimental studies analyzing the impact of corporate governance on the bank’s financial performance
+ The thesis has proposed to use a variable of the percentage of members of Board of Directors taking part in management in accordance with the provisions of Paragraph 1, Article 34 of the 2010 Law on Credit Institutions
+ The thesis has provided experimental evidence on the factors of corporate governance affecting the risks and financial performance of commercial banks in Vietnam
1.7 The structure of the thesis
CHAPTER 2: THEORETICAL BASIS ON THE IMPACT OF CORPORATE GOVERNANCE ON RISKS AND FINANCIAL PERFORMANCE OF THE BANK 2.1 Theoretical basis
2.1.1 Corporate governance concept
2.1.2 The difference between corporate governance in banks and other companies
2.1.3 Measure corporate governance
Table 2.1 Corporate governance metrics
No Name of
factor Signification Method of calculation Scientific bases
1 Bsize Members of Board
of Directors
Number of members of Board of Directors
De Andres and Vallelado (2008), Belkhir (2009), García-Meca et al (2015), Kusi et al (2018)
2 Bindep Independent
Members of Board
Number of independent numbers of Board of
De Andres and Vallelado (2008), Liang et al
Trang 7No Name of
factor Signification Method of calculation Scientific bases
of Directors Directors (2013), García-Meca et al
(2015)
3 Femdir
Female members
of Board of Directors
Number of female members of Board of Directors
Pathan and Faff (2013), García-Meca et al (2015), Dong et al (2014),
Mamatzakis and Bermpei (2015)
4 Fordir
Foreign members
of Board of Directors
Number of foreign members of Board of Directors
Dong et al (2017)
5 Execdir
Members of Board
of Directors taking part in
management
Number of members taking part in
management of Board
of Directors
The author proposes to comply with Paragraph 1, Article 34 of the Law on Credit Institutions 2010
of Vietnam
6 Edu Education level of
Board of Directors
Number of members with postgraduate level
of Board of Directors
Berger et al (2014), Chan
et al (2016), Setiyono and Tarazi (2018)
Source: Author’s proposal
2.1.4 The theory of corporate governance
2.1.4.1 Agency theory
2.1.4.2 Stewardship theory
2.1.4.3 Stakeholder theory
2.1.4.4 Resource dependence theory
2.1.5 Risks in banking business
2.1.5.1 Concept of risk
2.1.5.2 Types of risks in banking business
2.1.6 Financial performance in banking and measurement method
2.2 The impact of corporate governance on risks and financial performance of the bank
2.2.1 The impact of corporate governance on bank risk
2.2.1.1 Scale of Board of Directors and bank risk
Trang 82.2.1.2 Independent members of Board of Directors and bank risk
2.2.1.3 Female members of Board of Directors and bank risk
2.2.1.4 Foreign members of Board of Directors and bank risk
2.2.1.5 Members of Board of Directors taking part in management and bank risk
2.2.1.6 Education level of Board of Directors and bank risk
2.2.2 The impact of corporate governance on the financial performance of the bank
2.2.2.1 Scale of Board of Directors and financial performance of the bank
2.2.2.2 The percentage of independent member and financial performance of the bank 2.2.2.3 The percentage of female members of Board of Directors and the financial performance of the bank
2.2.2.4 The percentage of foreign members of Board of Directors and the financial performance of the bank
2.2.2.5 Percentage of members taking part in management of Board of Directors and financial performance of the bank
2.2.2.6 The percentage of members of Board of Directors with postgraduate level and financial performance of the bank
2.2.3 The relationship between risk and financial performance in the context of corporate governance
2.3 Research gaps
2.3.1 Research gaps
The subject is conducted for the following reasons:
First, through a review of previous studies, although there is evidence that banks’ compliance with Corporate Governance has increased, the impact of Corporate Governance on risks and financial performance of banks has differences in results from different studies such as positive, negative or non-relational effects, even mixed effects or
no conclusions in previous studies in developed countries and these studies when verified
in emerging markets give inconsistent results like those in developed markets Controversy occurs, the researchers argue that there are two reasons: (i) there are economic and political changes in developing countries, and all of these changes affect mechanisms of Corporate Governance; The result is an impact on the bank’s risk and financial performance Therefore, Corporate Governance is likely to continue to grow (ii) there are a significant differences in Corporate Governance in emerging markets and developed countries, that the development of financial markets is still limited, and therefore, the use of traditional financial channels become popular; high concentrated ownership structure; low institutional ownership; the market is less efficient because of less transparency, greater
Trang 9information asymmetry, higher supervision and enforcement costs; the government and its related organizations not only establish laws but also participants are active in the economy, for example through state-owned or state-controlled companies; trend-following investment is common, partly as a result of the inefficient market, but partly due to social practices Vietnam is a developing country and the legal environment is in the stage of completion to integrate with other countries in the region, therefore, there is a need for a study on the impact of Corporate Governance on risks and financial performance of banks Second, current researches in Vietnam also focus on giving the concepts of Corporate Governance and Corporate Governance in banks, international practices on Corporate Governance in banks From there, to assess the status of Corporate Governance in banks and make recommendations and solutions to improve Corporate Governance capacity to improve banking performance As researched by Ha Thi Thieu Dao (2012) assess the status of Corporate Governance of Vietnamese commercial banks according to international practices on Corporate Governance Meanwhile, Le Thi Huyen Dieu and Nguyen Trung Hau (2012) proposed to change the Corporate Governance management thinking in Vietnamese commercial banks, especially focus on risk management and meet international management standards; and Le Hoang Nga (2012) mainly gives cognitive thinking and some focused measures, which need to be done immediately to implement Corporate Governance in Vietnamese commercial banks There are very few experimental studies in Vietnam that analyze the impact of Corporate Governance on risk and financial performance of banks
Third, experimental studies in Vietnam now only analyze the impact of Corporate Governance on banking performance (Le Vinh Trien and Nguyen Duc Thinh, 2012; Dao Thi Thanh Binh and Huynh Thi Huong Giang, 2012 ; Tu et al, 2014) There are very few experimental studies in Vietnam that analyze the impact of Corporate Governance on bank risk or the impact of Corporate Governance on risks and financial performance of banks Finally, studies in the world mainly use data until 2013 and the researches conducted in Vietnam only stopped in 2012 There have been no updated studies for commercial banks
in Vietnam until the latest in 2017 Especially, in the period of 2011 - 2017, Vietnamese commercial banks implemented comprehensive restructuring of operations, including restructuring of banking management system The implementation of research during this period will help bank administrators and policy makers see the overall picture of the impact of Corporate Governance on risks and financial performance of commercial banks
in Vietnam to adopt policies for improvement of the Corporate Governance management capacity, minimize risks and improve financial performance of the bank
The above reasons suggest that there should be an evaluation study of the impact of Corporate Governance on risks and financial performance of commercial banks in Vietnam
2.3.2 Analytical framework
Trang 11Figure 2.1 Analytical framework of the study
owner’s equity (4) The ratio of outstanding loans
to mobilized capital
(5) Bank liquidity (6) Management effectiveness (7) Listed banks (8) Economic growth
Bank risk
Z-Score NPL
ROA ROE NIM
Financial
Trang 12Figure 3.1 Research process
Research issues
Impact of Corporate Governance on risks and financial efficiency
Objectives of the study
- Testing the impact of CG on risks of commercial banks in Vietnam
- Testing the impact of CG on financial efficiency of commercial banks in Vietnam
- Proposing a number of policy implications to improve the CG management capacity, limit risks and improve financial efficiency of commercial banks in Vietnam
- Theoretical foundations of CG, risks and financial efficiency
- Research overview of the impact of CG on risks and financial efficiency of banks
Conclusions and recommendations Results and discussions
Using the SGMM method for goal 1 Using GLS method for goal 2
Research Methods
Collecting and processing data, analyzing and estimating models
Study gaps and analytical framework
Proposing an experimental research model
Trang 133.2 Research data
The study uses secondary data with a data sample of 29 commercial banks in Vietnam from 2011-2017 As of December 31, 2017, according to the State Bank’s statistics, the number of commercial banks is 35 banks (including 7 State-owned commercial banks and
28 joint-stock commercial banks) The total assets of 35 commercial banks as of December
31, 2017 are VND 8,598,594 billion, while the total assets of the 29 commercial banks used by the author as of December 31, 2017 are VND 7,761,728 billion, accounting for 90.3% of total assets of commercial banks Thus, 29 commercial banks are selected by the author which ensure to represent commercial banks in Vietnam (Appendix 1)
In which, the State-owned commercial banks include 7 banks: Vietnam Bank for Agriculture and Rural Development, Vietnam Joint Stock Commercial Bank for Industry and Trade (CTG), Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB), Joint Stock Commercial Bank for Investment and Development of Vietnam (BID), Vietnam Construction Commercial Joint Stock Bank, Global Petro Sole Member Limited Commercial Bank, Ocean Limited Company In the sample, due to limited information, the state-owned commercial banks are included 3 banks by the author: CTG, VCB and BID The remaining 26 banks of the sample belong to joint stock commercial banks According
to updated data as of December 31, 2017, the number of banks listed on HOSE and HXN exchanges was 10 banks, including: CTG, VCB, BID, ACB, EIB, MBB, NCB, SHB, STB and VPB The remaining samples are unlisted banks
Data for calculating internal variables inside the bank are collected from annual reports, audited consolidated financial statements, corporate governance reports, annual shareholder meeting documents of commercial banks
Data for calculating external factors in the macro environment are collected from official sources such as the World Economic Outlook (WEO) data set of the International Monetary Fund (IMF), General Statistics Office of Vietnam
The data is collected and selected after eliminating banks that does not disclose information or disclose incomplete information, resulting in a sample of balance sheet data study consisting of 29 banks with 203 observations to be used for research purposes Therefore, the data set will be in a balanced form and is presented in Appendix 2
3.3 Measuring the impact of corporate governance on the risks of commercial banks
Trang 14𝛼0: Coefficient of original coordinates;
i: Cross data of banks;
t: Current year (t = 1,….,k);
Risk𝑖𝑡: Risk of bank i (Z-score, NPL) at time t;
CGit: The variables representing the Corporate Governance of bank i at time t, including: size of the Board of Directors (Bsize), Number of Independent Members of Board of Directors (Bindep), Number of female members of Board of Directors (Femdir), The percentage of foreign members of Board of Directors (Fordir), the percentage of members
of Board of Directors taking part in management (Execdir), and Education level of Board
of Board of Directors (Edu)
The variable adjusted to suit the Vietnamese context in the research model is the variable
of the percentage of members of Board of Directors taking part in management (Execdir),
as defined in Paragraph 1, Article 34 of the 2010 Law on Credit Institutions of Vietnam:
“Chairman of the Board of Directors, Chairman of the Board of Members of a credit institution must not concurrently be the executive of that credit institution and of other credit institutions” Therefore, in this thesis, the author uses the variable of the members of Board of Directors to participate in the management as compared to the previous studies, the majority used the dualityvariable (Chairman of the Board of Directors cum CEO)
Xit: The control variables include bank characteristics and macro variables: bank size (SIZE), size of lending activities (LAR), equity size (CAP), Loan to Deposit ratio (LDR), Bank Liquidation (LIQ), Management Effectiveness (CTI), Listed Bank (List) and Economic Growth (Ecogrow)
𝛼 ,γ,δ: Are the estimated coefficient vectors
ε𝑖𝑡:: Is the standard error
3.3.2 Measurement of variables in the research model
3.3.2.1 Risk dependent variable
The thesis measures the risks of Vietnamese commercial banks by the Z-score bankruptcy risk index inherited from the research of Boyd and Graham (1986), Goyeau and Tarazi (1992); Barry et al (2011) and Lepetit and Strobel (2013) and ratio of bad debts (NPL)
- Z-score is calculated based on the following formula:
𝑍𝑖𝑡 = 𝑅𝑂𝐴𝜎(𝑅𝑂𝐴)𝑖𝑡+ 𝐸𝑇𝐴𝑖𝑡
In which:
+ ROA: Return on assets of bank i at time t
+ ETA: Equity to asset ratio of bank i at time t
Trang 15+ σ(ROA): Standard deviation of returns on the assets of the entire sample
A higher Z-score indicates that the bank is more stable and less risky Because the Z-score has a high deviation, according to Laeven and Levine (2009), to reduce the bias, the natural logarithm of Z-score should be used Z-score is often used in studies to measure bank risk (for example: Angkinand and Wihlborg, 2010; Barry et al, 2011; Demirgüç-Kunt and Huizinga, 2013; Laeven and Levine, 2009)
- The traditional risk of banks is often related to lending and is measured by the ratio of bad debt to total outstanding debt (NPL), which reflects the quality of a bank’s assets (Demirgüç –Kunt et al, 2006; Shehzad et al., 2010; and Delis and Kouretas, 2011) Because bad debts cause losses for banks, high NPL ratios lead to high credit risks (Delis and Kouretas, 2011)
3.2.2.2 Independent variables for corporate governance in the model
a) Size of Board of Directors
Hypothesis 1a (H1a): Large size of Board of Directors is positively correlated with the bank’s Z-Score
Hypothesis 1b (H1b): Large size of Board of Directors is negatively correlated with the bank’s NPL
b) Independent members of Board of Directors
Hypothesis 2a (H2a): The percentage of independent members of the Board of Directors is
positively correlated with the bank’s Z-Score
Hypothesis 2b (H2b): The percentage of independent members in the Board of Directors is
negatively correlated with the bank’s NPL
c) Female members of Board of Directors
Hypothesis 3a (H3a): The high percentage of female board members is positively
correlated with the bank’s Z-Score
Hypothesis 3b (H3b): The high percentage of female members in the Board of Directors is
negatively correlated with the bank’s NPL
d) Foreign members of Board of Directors
Hypothesis 4a (H4a): The high percentage of foreign members of Board of Directors is
positively correlated with the bank’s Z-Score
Hypothesis 4b (H4b): The high percentage of foreigner members of Board of Directors is
positively correlated with the bank’s NPL
e) Percentage of members of Board of Directors taking part in management
Hypothesis 5a (H5a): The high percentage of board members taking part in management
is negatively correlated with the bank’s Z-Score
Trang 16Hypothesis 5b (H5b): The high percentage of members of Board of Directors taking part
in management is negatively correlated with the bank’s NPL
f) Education level of Board of Directors
Hypothesis 6a (H6a): The high percentage of members of Board of Directors with
postgraduate degrees is significantly correlated with the bank’s Z-Score
Hypothesis 6b (H6b): The high percentage of board members with postgraduate degrees is
significantly correlated with the bank’s Z-Score
3.3.2.3 Control variables in the model
Table 3.1 Description of the variables used in the regression model 1
Variable Measurement method Scientific basis
Expected mark Z-Score NPL Dependent variable (Risk)
NPL NPL to total outstanding
loan
PL NPL to total outstanding loan Dong et al (2014), Berger et al (2014), Berger
et al (2016), Calomiris and Carlson (2016), Dong et al (2017), Skała and Weill (2018)
Z-Score = ln (𝑅𝑂𝐴𝜎(𝑅𝑂𝐴)𝑖𝑡+ 𝐸𝑇𝐴𝑖𝑡)
Pathan (2009); Anginer et al (2014); Dong et al (2014);
Chan et al (2016); Berger et
al (2016); Mollah et al (2017); Ben Zeineb and Mensi (2018); Skała and Weill (2018); Setiyono and Tarazi (2018)
Independent variable (Corporate Governance - representative variable of Corporate governance)
Bsize
Natural logarithm of BOD Berger et al (2014), Dong et
al (2017), Ben Zeineb and Mensi (2018)
Bindep
Percentage of independent members of Board of Directors/Total members
Chan et al (2016), Dong et