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Journal cover: Corporate Governance

Corporate Governance

ISSN: 1472-0701

Online from: 2001

Subject Area: Business Ethics and Law

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Ownership structure, corporate governance and bank efficiency: an empirical analysis of panel data from the banking industry in Ghana


Document Information:
Title:Ownership structure, corporate governance and bank efficiency: an empirical analysis of panel data from the banking industry in Ghana
Author(s):Godfred A. Bokpin, (Graduate School of Economics, Osaka University, Osaka, Japan and the Department of Finance, University of Ghana Business School, Accra, Ghana)
Citation:Godfred A. Bokpin, (2013) "Ownership structure, corporate governance and bank efficiency: an empirical analysis of panel data from the banking industry in Ghana", Corporate Governance, Vol. 13 Iss: 3, pp.274 - 287
Keywords:Bank efficiency, Banks, Corporate governance, Ghana, Organizational structures, Ownership structure
Article type:Research paper
DOI:10.1108/CG-05-2010-0041 (Permanent URL)
Publisher:Emerald Group Publishing Limited
Acknowledgements:The author wishes to express his appreciation to the Research and Conferences Committee, University of Ghana Business School, Legon, for financial support, and to thank Professor Wataru Ohta and Professor David Flath, Osaka University, Japan, for useful comments. The findings, opinions and recommendations are those of the author.Received May 2010 Accepted April 2011
Abstract:

PurposeThe purpose of this paper is to document the effect of ownership structure and corporate governance on bank efficiency in the Ghanaian banking industry.

Design/methodology/approachThe author applies both accounting data and efficiency measures from the period 1999-2007 via panel data analysis. Efficiency is measured by computing distances from the stochastic frontiers of estimated translog cost and profit functions. These efficiency measures are regressed on ownership and governance variables with dummy variables for bank types.

FindingsThe results show that foreign banks are more cost-efficient than domestic banks, but not necessarily more profit-efficient. Nevertheless, foreign banks are more profitable than domestic banks and enjoy better quality loans. Managerial ownership leads to the cost inefficiency of banks. Banks with inside ownership are unprofitable overall but maintain a high loan quality. Governance (a larger board size) strongly improves profit efficiency but slightly worsens banks' cost efficiency. Finally, the capital adequacy ratio and bank size are both significant predictors of bank efficiency in Ghana.

Originality/valueFew, if any, studies have been carried out in the Ghanaian banking industry.



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