THE IMPACT OF CORPORATE GOVERNANCE PRACTICES ON BANK EFFICIENCY: A CASE OF TURKEY

Year 2016, Issue: 25, 305 - 322, 29.12.2016

Mustafa Soba İşıl Erem Fatih Ceylan

Abstract

This study investigates the relationship between corporate governance
and the efficiency of Turkish banks. We use a sample of 10Turkish depository
banks listed in Borsa Istanbul covering the ten year period 2005-2015.Data
Envelopment Analysis (DEA) has been used in examining the efficiency levels
of the sampled Turkish banks and panel regression analysis was used for
finding out whether there is an effect of corporate governance on bank
efficiency. The results have shown that free float rate and board independence
have a negative and significant impact on the efficiency of the banks. As for
the other variables; it is seen that major shareholder, number of committees
and board size have positive and significant relationship with the bank
efficiency. Finally the results have shown that there is no statistically
significant relationship between institutional ownership and bank efficiency

Keywords

Bank Efficiency, Corporate Governance, Data Envelopment Analysis, Panel Data, Turkey.

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