The aim of this thesis is to investigate corporate governance practices of firms, in particular financial institutions, and their impact on the performance of these institutions. As such it will contribute to the debate on the importance of corporate governance for banks. The investigation will cover examples from developed and transition economies. Corporate scandals in the 1990s and 2000s drew the attention of governments to the importance of corporate governance, and induced legislation to prevent similar situations in the future. This thesis highlights the differences between corporate governance of firms and that of banks and investigates the nature of the relationship between corporate governance practices and performance of banks in the USA (as an example of a developed economy) and Kosova and Montenegro (as examples of South East European (SEE) transition economies). The thesis will also investigate the state of corporate governance in the two SEE countries and its developments since these countries became independent. This thesis will address two methodological issues that have been ignored or not treated jointly by previous research: the endogenous nature of corporate governance; and the dynamic aspect of the relationship with performance. In the context of SEE countries this thesis represents the first attempt to analyse the development of a corporate governance framework for financial institutions in Kosova and Montenegro, involving the creation of an index for the quality of corporate governance and, to the extent that the data permits, the first analysis of the relationship between corporate governance quality and the performance of financial institutions. The thesis investigates these questions by firstly embarking on a critical review of the literature to identify the strengths and weaknesses of the previous work in this area and identify the gap in the literature and secondly engaging in empirical investigation of the relationship. The data used for the empirical part of the thesis consists of published data on corporate governance ranking of US banks and the information on financial operations of banks from the Bankscope database. There are no published datasets on the state of corporate governance in SEE banks. A bank survey was therefore organised by the author to explore the compliance of these banks with OECD Corporate Governance Principles. The data was supplemented with the financial information of individual banks obtained from their annual reports. Using both, cross section and dynamic panel model techniques, the empirical investigation shows that there is a positive relationship between the measure of good corporate governance and the market capitalisation of banks in the USA. A similar relationship also exists between one dimension of corporate governance (shareholders’ rights) and the performance of financial institutions in Kosova and Montenegro. Thus, this research contributes to the scarce empirical research on the relationship between corporate governance and performance of financial institutions in the developed economies, and to the not hitherto investigated relationship in SEE countries.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:600811 |
| Date | January 2013 |
| Creators | Tosuni, Gëzim |
| Publisher | Staffordshire University |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://eprints.staffs.ac.uk/2030/ |
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