The financial crisis as a wake-up call: corporate governance and bank performance in an emerging economy
ISSN: 1472-0701
Article publication date: 24 September 2018
Issue publication date: 4 February 2019
Abstract
Purpose
This paper aims to investigate the effects of different sets of corporate governance (CG) practices on bank performance before, during and after the financial crisis. The study proposes some policy measures for improved CG practices to protect banks from the detrimental effects of future financial crises and economic meltdowns in the context of emerging markets such as Kazakhstan.
Design/methodology/approach
The study analyses data from all commercial banks listed in Kazakhstan Stock Exchange for the pre-economic crisis, during the crisis and after the economic crisis periods. The study uses the panel regression model to control unobserved time-constant heterogeneity.
Findings
The study found that better CG practices led to better operating performance of the banks after the financial crisis periods. The changes in CG codes, board structures, disclosure requirements and board members’ competencies over time had a significant influence on CG practices and subsequently improved operating performance of the banks.
Originality/value
This is one of the first studies to examine the effects of CG practices on bank performance in central Asian transition economies, which are still heavily influenced by Soviet heritage and legacy.
Keywords
Citation
Orazalin, N. and Mahmood, M. (2019), "The financial crisis as a wake-up call: corporate governance and bank performance in an emerging economy", Corporate Governance, Vol. 19 No. 1, pp. 80-101. https://doi.org/10.1108/CG-02-2018-0080
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited