The impact of non-performing loan sales on the stock market: The role of corporate governance in an emerging market

Pirgaip, Burak; Uysal, Aydin

doi:10.1016/j.bir.2023.01.006

Cited by 3 publications

(1 citation statement)

References 32 publications

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“…However, studies of corporate governance involving the Corporate Governance Index have been criticized for their narrow focus on individual characteristics such as board size (Watson, 2013), female board representation (Strøm et al, 2014), relations of board members with owners (Farhan et al, 2020) and ownership structure (Ryu & Yoo, 2011), as they did not fully assess the quality of corporate governance. To overcome these shortcomings, other studies have taken a more comprehensive approach to create their Corporate Governance Index (Schweizer et al, 2019;Zhou et al, 2021;de Carvalho et al;, Xu et al, 2022Pirgaip & Uysal, 2023). Musa et al (2015) developed the first version of the Corporate Governance Index, which they later applied in Musa et al (2018) in order to assess the level of corporate governance in the Slovak capital market between 2011 and 2015.…”

Section: Literature Reviewmentioning

confidence: 99%

Adoption of corporate governance principles in the wake of the Covid-19 pandemic: The case of Slovakia

Musová

Musa

Rech

et al. 2023

Journal of International Studies

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During periods of uncertainty, such as the Covid-19 pandemic, the significance of Corporate Governance (CG) practices is highlighted. The study aims to evaluate the adoption of CG practices in companies listed on the Slovak capital market, with a specific focus on the impact of the Covid-19 pandemic. The data were collected manually from the annual reports of these companies, and covered the period from 2016 to 2021. The Corporate Governance Index, which is developed through Saaty's method, is used to evaluate the overall level of CG implementation. Individual components of the CG Index are also examined. Between 2016 and 2021, the majority of the examined CG criteria and the overall CG Index showed improvement as compared to 2011 - 2015. However, currently, nearly 50% of companies do not disclose information on corporate governance, remuneration, and risk management, and many companies have not succeeded in establishing nomination and remuneration committees or making any progress in terms of board gender diversity. The Covid-19 pandemic has had a moderate impact on some criteria. On the one hand, the information on board member remuneration and risk management has moderately deteriorated. On the other hand, the audit committee has shown improvement. Nevertheless, the pandemic has not significantly affected the overall adoption of CG practices in Slovak companies.

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Section: Literature Reviewmentioning

confidence: 99%

Adoption of corporate governance principles in the wake of the Covid-19 pandemic: The case of Slovakia

Musová

Musa

Rech

et al. 2023

Journal of International Studies

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The Yin and Yang of banking: Modeling desirable and undesirable outputs

Wang,

Kumbhakar,

Jin

2024

European Journal of Operational Research

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Does governance affect non-performing loans? Empirical evidence of Indonesian banks

Nurkhin,

Fachrurrozie,

Kania Widiatami

et al. 2024

Banks and Bank Systems

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This paper examines how good corporate governance (GCG) affects Indonesian banks’ non-performing loans (NPLs) and its relevance to the current banking sector situation in Indonesia. The research findings provide a comprehensive understanding of the effect of bank-specific factors on NPLs, offering timely and important insights for the banking industry. This quantitative study focuses on commercial banks listed on the Indonesian Stock Exchange in 2021. The observation period spans four years (2018–2021), utilizing 216-unit panel data from 54 banks for analysis. Documentation was used for data collection, and panel data multiple regression analysis was employed as the data analysis technique. The findings indicate that increased board of directors’ meetings are associated with higher NPLs, while having independent board commissioners correlates with lower NPLs. The p-value of the board of director meetings is 0.027, and the coefficient is 0.005037. The p-value of the board of independent board commissioners is 0.017, and the coefficient is –0.00109. Effective GCG implementation is crucial in maintaining credit quality and reducing NPL levels. The p-value of the GCG score is 0.043, and the coefficient is –0.42985. However, the frequency of Board of Commissioners’ meetings does not significantly affect NPLs. The study also shows that the Loan Deposit Ratio (LDR) and bank size negatively and significantly impact NPLs. In contrast, Return on Equity (ROE) and leverage do not significantly affect NPL levels in Indonesian banks. This study provides empirical evidence that underscores the importance of robust GCG, especially during the challenging business conditions triggered by the pandemic. AcknowledgmentsThis study received funding from LPPM UNNES, contract number 12.12.4/UN37/PPK.10/2023.

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The impact of non-performing loan sales on the stock market: The role of corporate governance in an emerging market

Cited by 3 publications

References 32 publications

Adoption of corporate governance principles in the wake of the Covid-19 pandemic: The case of Slovakia

Adoption of corporate governance principles in the wake of the Covid-19 pandemic: The case of Slovakia

The Yin and Yang of banking: Modeling desirable and undesirable outputs

Does governance affect non-performing loans? Empirical evidence of Indonesian banks

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