Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 209

Full Length Research Paper

Does corporate governance affect bank performance in Brazil, Russia, India, and China?

Simon M. S. So
  • Simon M. S. So
  • Faculty of Business Administration, University of Macau, Macao SAR, China.
  • Google Scholar
Simon Q. X. Liao
  • Simon Q. X. Liao
  • Faculty of Business Administration, University of Macau, Macao SAR, China.
  • Google Scholar


  •  Received: 27 June 2022
  •  Accepted: 04 June 2024
  •  Published: 31 July 2024

Abstract

This study utilizes a sample of 67 selected banks from four well-known developing countries, namely Brazil, Russia, India, and China (hereafter BRIC), over nine consecutive years from 2011 to 2019 to examine the effects of corporate governance on bank performance. The study aims to investigate whether the concept of corporate governance in developed countries can also be applied in the banking industry of BRIC. The two measures of bank performance analyzed are profitability and liquidity, and the study considers five indicators of corporate governance: board size, gender diversity, audit committee, foreign ownership, and ownership concentration. Employing pooled and panel regressions on the two proxies of each performance measure against the five selected corporate governance indicators, the results reveal that the proportion of female directors on a board positively affects the profitability of BRIC banks, while the presence of foreign owners can enhance the liquidity of the banks. However, in individual BRIC countries, bank performance appears to be influenced by different corporate governance indicators, likely due to cultural differences among these nations.

 

Key words: Corporate governance, bank performance, banking industry, BRIC.