Article: Do family ownership and control influence bank performance and risk-taking? A cross-country analysis of emerging economies Journal: International Journal of Governance and Financial Intermediation (IJGFI) 2022 Vol.1 No.3 pp.167 - 192 Abstract: This study examines how family ownership and family-aligned board and management as well as government and foreign shareholdings influence profitability, valuation, and credit risk of banks in emerging economies. It is based on fixed effect regressions to analyse an unbalanced panel dataset on 546 bank-year observations from Turkey, Egypt, Jordan, Malaysia, and Indonesia covering a period of seven years (2009-2015). Overall, the estimation results suggest that family ownership and family-aligned board and management are positively associated with bank performance and negatively associated with credit risk. In addition, ownership concentration has an inverse relationship with bank profitability and valuation. Moreover, foreign ownership and government shareholding show a positive association with bank performance and a negative association with credit risk. Altogether, the study results are consistent with the arguments of stewardship theory and resource-based view. The estimation results have policy implications for corporate governance reform in relation to family ownership and control as well as government and foreign ownerships in concentrated banking systems in emerging economies. Inderscience Publishers - linking academia, business and industry through research

Title: Do family ownership and control influence bank performance and risk-taking? A cross-country analysis of emerging economies

Authors: Tanzeela Hanif; Faizul Haque

Addresses: Department of Finance, University of Birmingham, Birmingham, B15 2TT, UK ' Southampton Business School, University of Southampton, SO171BJ, UK

Abstract: This study examines how family ownership and family-aligned board and management as well as government and foreign shareholdings influence profitability, valuation, and credit risk of banks in emerging economies. It is based on fixed effect regressions to analyse an unbalanced panel dataset on 546 bank-year observations from Turkey, Egypt, Jordan, Malaysia, and Indonesia covering a period of seven years (2009-2015). Overall, the estimation results suggest that family ownership and family-aligned board and management are positively associated with bank performance and negatively associated with credit risk. In addition, ownership concentration has an inverse relationship with bank profitability and valuation. Moreover, foreign ownership and government shareholding show a positive association with bank performance and a negative association with credit risk. Altogether, the study results are consistent with the arguments of stewardship theory and resource-based view. The estimation results have policy implications for corporate governance reform in relation to family ownership and control as well as government and foreign ownerships in concentrated banking systems in emerging economies.

Keywords: family ownership; family-aligned board and management; ownership concentration; government and foreign shareholdings; bank profitability and valuation; bank risk-taking; emerging economies.

DOI: 10.1504/IJGFI.2022.123856

International Journal of Governance and Financial Intermediation, 2022 Vol.1 No.3, pp.167 - 192

Received: 16 Mar 2020
Accepted: 11 Jun 2021
Published online: 04 Jul 2022 *

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Title: Do family ownership and control influence bank performance and risk-taking? A cross-country analysis of emerging economies

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