Does corporate governance play an important role in BHC performance? Evidence from the U.SWei-Kang Wang, Wen-Min Lu and Yi-Ling Lin Economic Modelling, 2012, vol. 29, issue 3, 751-760 Abstract: This study explores the relationship between the operating performance and corporate governance of bank holding companies (BHCs) in the U.S. The modified data envelopment analysis (DEA) is utilized to integrate the five rating indicators of CAMEL (Capital Adequacy, Asset Quality, Management, Earnings, and Liquidity) so as to estimate the BHCs' performance. This study also employs the modified tiered DEA to categorize 68 BHCs into three Tiers. Additionally, the truncated-regression is employed to discuss whether or not the corporate governance would affect the performance of BHCs. The empirical results present the trade-off relationship with CAMEL indicators in the Tier1—Efficient BHCs. Moreover, it has been found that there are negative impacts on BHC's performance from board size, outside directors, the average age of directors and CEO/Chairman duality, while there are positive impacts from the number of committee and Big-4 auditors. The results further prove that corporate governance is important for the operating performance of BHCs. Keywords: Bank holding companies; CAMEL; Data envelopment analysis; Corporate governance; Truncated-regression (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:3:p:751-760 DOI: 10.1016/j.econmod.2012.01.021 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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