Board Characteristics and Chinese Bank Performance

By Q. Liang, Pisun Xu, P. Jiraporn. Social Science Research Network, 2013

467 citations recorded by the source corpus.

Using a sample of 50 largest Chinese banks during the period of 2003–2010, we explore a comprehensive set of board characteristics (size, composition and functioning of the board) and analyze their impacts on bank performance and bank asset quality in China. We find that the number of board meetings and the proportion of independent directors have significantly positive impacts on both bank performance and asset quality while board size has a significantly negative impact on bank performance. We find new evidence that the degree of bank boards’ political connection is negatively correlated with bank performance and asset quality. The findings suggest that the board of directors plays a significant role in bank governance in China.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/76c5834f812bc9091d6526b63ba761b570483fdf

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Citations in the corpus

Non-Performing Loans, Moral Hazard and Regulation of the Chinese Commercial Banking System (2016, unknown): “The reforms are introduced in a series of joint-stock or joint-equity banks (Liang et al., 2013), such as the Bank of Communications , which was established in 1986 as the first countrywide joint-stock commercial bank; Shenzhen Development Bank Co., Ltd, which was established in 1987 as the first…”
Governance, Efficiency and Risk Taking in Chinese Banking (2017, unknown): “Totassets is the natural logarithm of the bank’s total asset, which controls for size (Delis & Kouretas, 2011; Liang et al., 2013).”
Corporate governance and credit rating in Islamic banks: Does Shariah governance matters? (2015, background): “Board size and board independence are two of the most deeply studied board characteristics (Armstrong et al. 2010; Linck et al. 2008; Lehn et al. 2008; Ajinkya et al. 2005; Karamanou and Vafeas 2005; Pathan and Faff 2013; Liang et al. 2013; Adams and Mehran 2013; De Andres and Vallelado 2008).”
Age diversity, directors' personal values, and bank performance (2016, background): “During the sample period, the average ROA and ROE are 0.01 and 0.19, which is comparable to 0.01 and 0.14 given in Liang et al. (2013) who study a sample of 52 Chinese banks during the period from 2003 to 2010.”
Female board directorship and firm performance: What really matters? (2018, background): “Our sample includes more size diversity between rms, and French firms are characterized by higher ownership conentration and weak minority shareholder protection, which may ositive in Liang et al. (2013) , not significant in Adams and Ferreira (2009) , and egative in Pathan and Faff (2013) .”
Intellectual Capital Performance and Profitability of Banks: Evidence from Pakistan (2019, background): “…to support the electoral campaigns of politicians (Yao et al. 2018), because during the period of government elections, the politically-connected banks lend more to those firms linked with politicians on low cost and easy terms, and thus reduce the bank’s profitability (Liang et al. 2013).”