Impact of Bank-Specific, Corporate Governance and Environmental Factors on Bank Efficiency and Profitability in Pakistan
Keywords:Too big to fail paradigm, Critical mass/Tokenism theory, CSR index, Data envelopment analysis (DEA), Return on Assets (ROA)
The study aims to investigate the impact of bank-specific, board structure, gender diversity, and environmental factors on bank efficiency and profitability in Pakistan by taking a sample of seventeen commercial banks for the period 2013-2018. Data envelopment analysis (DEA) and return on assets (ROA) are used as a proxy to measure bank efficiency and profitability. Panel estimation techniques and Generalized Method of Moments (GMM) are used to conceptualize the research framework and to test the hypotheses. The findings indicate a negative relationship of non-performing loans, advances, level of involvement of women into other committees, and CSR index with ROA; while more presence of women on board reveals a positive and significant impact on ROA that is consistent with critical mass theory. However, CEO duality shed a positive impact on technical efficiency; while bank size signifies an inverse relationship with ROA and technical efficiency. Moreover, deposit influences ROA positively; while board size finds a positive and significant relationship with ROA and technical efficiency. The findings are important for various stakeholders as they can efficiently take their decision-making to better understand the factors influence bank performance. This study recommends future researchers do the same research by inculcating a larger sample size.
How to Cite
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish with this journal agree to the following terms:
- The author(s) retain the copyright on work published in the Journal of Applied Economics and Business Studies and grant the journal right of first publication.
- Individual articles are published Open Access under the Creative Commons Attribution 4.0 International License , which permits unrestricted use, distribution, and reproduction on any medium, provided the original author (s) and source are properly credited.