Corporate Governance and Performance of Banking Firms: Evidence from Indonesia, Thailand, Philippines, and Malaysia
ABSTRACT: Corporate governance
still becomes a major issue during the
post-financial crisis period in Asian emerging market, such as Indonesia,
Thailand, Philippines and Malaysia. Particularly, the financial institutions
have implemented corporate governance reforms to enhance the protection of
shareholders and stakeholders interest. The consequences emerge as it allows for greater monitoring especially
by the shareholders. The objective of this study is to measure the corporate governance and
performance in banking sectors in particular, which is determining by the
corporate governance mechanisms. In the last part, this study attempts to
identify whether there exist any
differences in the monitoring mechanisms of banking firms and non-banking
firms. This study found that only the foreign shareholder which is represent of
the ownerships monitoring mechanisms are significantly negatively related with
corporate performance measures in the banking firms in Asian emerging markets.
Second, the Internal Control Monitoring Mechanisms showed the insignificant
relationship with corporate performance, but only one of the internal control
monitoring mechanisms which is CEO duality provides evidence in order to
explain the relationship better. Third, the disclosure monitoring mechanisms
through the big 4 external auditor is significantly related to corporate
performance, instead of the big 3 rating agency. Last, there are similarities
between bank and non-bank in terms of corporate governance monitoring
mechanisms.
Author: Maria Praptiningsih
Journal Code: jpmanajemengg090011
