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The Foreign Equity in Banking Industry and the Effectiveness of Corporate Governance: Essential or a Soap Opera?

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  • Banu Dincer

    (Galatasaray University)

Abstract

This study investigates the impact of foreign equity and foreign board members on corporate governance mechanisms in banking industry in a developing country. Using a data set of recent period and OLS regression model, the effect of board size and composition on performance is analyzed. The results indicate that the presence of foreign equity and board members forces banks to reorient the corporate strategy and reduce operating and total costs. Foreign board members’ independence appears to play an important role in the corporate orientation and internal cost management. The study could be an example for banks in countries experiencing similar conditions.

Suggested Citation

  • Banu Dincer, 2012. "The Foreign Equity in Banking Industry and the Effectiveness of Corporate Governance: Essential or a Soap Opera?," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(4), pages 339-352, October.
    • Handle: RePEc:hur:ijaraf:v:2:y:2012:i:4:p:339-352
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    More about this item

    Keywords

    Ownership Structure; Board Composition; Performance; Corporate Governance;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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