Abstract
This paper examines the impacts of corporate governance on the efficiency of ASEAN banks from 2007 to 2014. The bank efficiency levels are estimated using the SFA model of Kumbhakar et al. (J Prod Anal 41:321–37, https://doi.org/10.1007/s11123-012-0303-1, 2014). The impacts of various corporate governance aspects on bank efficiency are assessed using the Dynamic system GMM model. The results indicate that government-owned banks are more cost-efficient, but not more profit efficient than both foreign and private banks. Banks with larger boards are more cost-efficient in both the long term and short term, but only more profit efficient in the short term. In addition, foreign ownership, board independence, and CEO duality show no significant impact on bank efficiency levels.
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This paper examines the corporate governance practices and bank performance in 6 ASEAN countries, including Vietnam, Cambodia, Indonesia, Malaysia, the Philippines, and Thailand.
The corporate governance codes for each country during the sample period are as following: Vietnam (Decree 59/2009/ND-CP), Cambodia (2008-Prakas on Governance in Bank and Financial Institutions No B-7-08-211), Indonesia (Bank Indonesia Regulation Number 8/4/PBI/2-6), Malaysia (Malaysia code on Corporate Governance 2007, amended in 2012), the Philippines (Monetary Board Resolution No. 994 dated 28 June 2001), Thailand [Financial Institution Business Act B.E. 2251 (2008)].
The regulations regarding board size: Vietnam (3–11 board members), Cambodia and Malaysia (decided by the bank), Indonesia (minimum 3 members), the Philippines (4–15 members), Thailand (minimum 5 members)
The regulation regarding number of minimum independent directors: Vietnam, Cambodia, and the Philippines (2 independent directors); Indonesia (50% board members are independent directors); Malaysia (one-third of board members are independent directors); Thailand (one-third of board members are independent directors and the number shall not be fewer than 3).
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Nguyen, T.L.A., Vo, X.V. Does corporate governance really matter for bank efficiency? Evidence from ASEAN countries. Eurasian Econ Rev 10, 681–706 (2020). https://doi.org/10.1007/s40822-020-00151-4
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DOI: https://doi.org/10.1007/s40822-020-00151-4