Female board representation, risk-taking and performance: Evidence from dual banking systems

Khan, Mushtaq Hussain; Fraz, Ahmad; Hassan, Arshad; Abedifar, Pejman

doi:10.1016/j.frl.2020.101541

Cited by 23 publications

(11 citation statements)

References 47 publications

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“…Likewise, the coefficients of female ratio and risk management committee are significant and positive implies that presence of female on the board and having a risk management committee improves bank stability. These results are consistent with previous studies, which argue that banks having female board representation and strong risk management committee face lower risk taking (Faccio et al, 2016;Green & Homroy, 2018;Khan et al, 2020;Perryman et al, 2016).…”

Section: Competition and Bank Stability: Baseline Resultssupporting

confidence: 93%

“…Second, a comparative analysis of competition and stability relationship is presented for Islamic and conventional banks operating alongside each other in dual banking system. Hence, this study we complement the works of Abedifar et al (2013), Abedifar et al (2017), Beck et al (2013), Hasan and Dridi (2011), Khan et al (2020) and Mollah and Zaman (2015). These studies provide comparative analyses of financial stability, risk management, performance, and efficiency between these two types of banks.…”

Section: Introductionmentioning

confidence: 87%

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Bank Competition–Stability Relations in Pakistan: A Comparison between Islamic and Conventional Banks

Hassan¹,

Ijaz²,

Khan³

2021

IJBS

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This study comparatively analyses the financial stability of Islamic and conventional banks in Pakistan. Using data of 29 conventional and 9 Islamic banks over 18 years, the study first estimates bank competition and stability using Lerner index and Z-Score, respectively. Generalized least squares regression is used and the coefficients are estimated by using random-effects estimator. Results of the mean comparison show that Islamic banks carry more market power (less competition) and are more stable compared to their conventional counterparts. Results of a panel regression show that competition positively affects the stability of the banking sector and this effect is higher for Islamic banks due to their market power. Results also show that bank stability in Pakistan was reduced during global crisis period; however, presence of Islamic banks contributes to the stability even during crisis. Finally, this study supports the competition-stability hypothesis for Islamic banking in Pakistan. Recommendations are given at the end.

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Section: Competition and Bank Stability: Baseline Resultssupporting

confidence: 93%

Section: Introductionmentioning

confidence: 87%

Bank Competition–Stability Relations in Pakistan: A Comparison between Islamic and Conventional Banks

Hassan¹,

Ijaz²,

Khan³

2021

IJBS

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“…Adams and Ferreira (2009) showed that the presence of female directors improves board meeting attendance. Recently, Khana et al (2020) assume that the female presence on board of directors in Islamic banks has a negative impact on the functioning of boards and consequently on the financial performance of IBs. This can be due to the less acceptance of women in the leadership position, as their presence can contradict with the Islamic Muslim Laws.…”

Section: 6mentioning

confidence: 99%

Is the Sharia supervisory board a friend or an enemy of Islamic banks?

Baklouti

2020

JIMA

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Purpose This paper is an empirical study of the effect of the characteristics of the Sharia supervisory board (SSB) on the financial performance of Islamic banks. Design/methodology/approach Using 42 Middle East and North Africa (MENA) Islamic banks outside the Gulf Cooperation Council (GCC) and non-Islamic countries during the 2011/2018 period, a random-effects generalized lease square method for the regression analyzes is applied. Findings The obtained results show that the characteristics of the SSB affect the financial performance of Islamic banks. The results also affirm that a large-sized board of directors and the number of SSB meetings improve banking performance while the cross-mandate seems to destroy it. On the other hand, the SSB members’ competence and reputation and the proportion of women sitting in SSB have no impact on the financial performance of Islamic banks. Research limitations/implications This paper gives a comprehensive literature survey on the effect of the characteristics of the SSB on the financial performance of Islamic banks. Practical implications This study offers insights into the practitioner and Islamic banking regulators interested in enhancing the legitimacy of corporate governance in Islamic financial institutions. Originality/value This paper is among the few studies that investigate the effect of the characteristics of SSB on the financial performance of Islamic banks in particular in Islamic banks in the MENA region outside the GCC and in non-Islamic countries.

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“…This study contributes to the literature in two ways. First, it extends the broad literature on risk in Islamic banking (Abedifar et al, 2013;Beck et al, 2013;Mollah et al, 2015;Abedifar et al, 2017;Khan et al, 2020), by investigating how the risk-taking of Islamic banks is differently affected by corruption compared to their conventional counterparts. Specifically, this study examines the role of SSBs as a channel to moderate the effect of corruption on the risk-taking of Islamic banks.…”

Section: Introductionmentioning

confidence: 89%

Corruption and bank risk-taking: The deterring role of Shari’ah supervision

et al. 2021

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This paper investigates whether the risk-taking of Islamic banks is differently affected by corruption compared to conventional banks. Indeed, the presence of Shari'ah supervisory boards (SSBs), as a cornerstone of Islamic banking, is expected to deter the influence of corruption on risk-taking for Islamic banks. We consider a matched sample of 70 Islamic and conventional banks operating in 10 OIC (Organization of Islamic Cooperation) countries over the 2012-2017 period.We find consistent evidence that higher levels of corruption are associated with higher bank risk for both conventional and Islamic banks. However, this association is stronger for conventional banks. Furthermore, for Islamic banks, the impact of corruption on risk-taking is significantly reduced with higher representation of females in Shari'ah supervisory boards and higher academic qualifications of board members. The role played by such board members in mitigating the impact of corruption on risk-taking is more effective for Islamic banks than for conventional banks.

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Female board representation, risk-taking and performance: Evidence from dual banking systems

Cited by 23 publications

References 47 publications

Bank Competition–Stability Relations in Pakistan: A Comparison between Islamic and Conventional Banks

Bank Competition–Stability Relations in Pakistan: A Comparison between Islamic and Conventional Banks

Is the Sharia supervisory board a friend or an enemy of Islamic banks?

Corruption and bank risk-taking: The deterring role of Shari’ah supervision

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