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A comparative analysis of the performance of Islamic and conventional banks: does corporate governance matter?

Author

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  • Ejaz Aslam
  • Razali Haron
  • Salman Ahmad

Abstract

The purpose of this study is to investigate the impact of corporate governance (CG) internal structure on the performance of Islamic and conventional banking system in Pakistan. To account for the problem of heteroscedasticity, this study used GLS estimation technique by using a sample of five fully fledged Islamic and 15 conventional banks for the period from 2006 to 2015. The study finds that board size and its composition largely contribute to the Islamic and conventional banking performance. However, board committees have an insignificant relationship with the performance of conventional and Islamic banks that demands further investigation into the structure and powers of the board committees. In short, this study provides evidence that corporate governance does matter for the performance of Islamic and conventional banking. The current findings are useful for the policymakers and regulators to improve the existing governance structure for achieving better performance in the financial sector.

Suggested Citation

  • Ejaz Aslam & Razali Haron & Salman Ahmad, 2021. "A comparative analysis of the performance of Islamic and conventional banks: does corporate governance matter?," International Journal of Business Excellence, Inderscience Enterprises Ltd, vol. 24(1), pages 53-67.
    • Handle: RePEc:ids:ijbexc:v:24:y:2021:i:1:p:53-67
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    Cited by:

    1. Douglas A. Adu, 2022. "Sustainable banking initiatives, environmental disclosure and financial performance: The moderating impact of corporate governance mechanisms," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2365-2399, July.
    2. Umer Gulzar & Sajjad Nawaz Khan & Fahad Javed Baig & M. Akbar Ali Ansari & Rabia Akram & Muhammad Kamran, 2021. "The Impact Of Corporate Governance On Risk Management: Evidence From The Banking Sector Of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(3), pages 196-207.

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