The Impact of Corporate Governance on Bank Performance: Evidence From Ethiopian Banks' Board Structure and Financial Ratios
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Date
2025-04-16
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Publisher
AAU
Abstract
This study aims to investigate the influence of corporate governance on bank performance in
Ethiopia, focusing on how board characteristics (such as size and gender diversity) and
regulatory financial ratios impact banks from 2010 to 2023. The analysis is based on data
gathered from 10 licensed commercial banks operating in the country. The effect of corporate
governance methods on financial performance of banks, as measured by return on equity and
Return on asset, was assessed using a quantitative research methodology. Panel data regression is
adopted for estimation of main results. The notable findings show that board gender composition
and liquidity ratio has a significant and positive relationship with bank performance.
Furthermore, the results show that capital adequacy ratio have a significant and negative
association with bank performance. Furthermore, the research revealed that the choice of
performance metrics significantly impacts corporate governance analyses. The study observed
varying outcomes depending on whether Return on Assets (ROA) or Return on Equity (ROE)
was used to assess firm performance