The Significance of Corporate Governance: Insights from the Banking Industry in Kosovo

Yıl 2023, Cilt: 32, 94 - 102, 30.11.2023

Burim Gashı Petrit Hajdarı

https://doi.org/10.55549/epess.1412827

Öz

This research investigates the influence of corporate governance (CG) practices and specific financial indicators on the performance of Kosovo's banking sector from 2015 to 2022. The study uses secondary data from nine commercial banks and employs the Ordinary Least Squares (OLS) estimation method to assess their impact on Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM). The findings highlight the significant impact of these variables on the banking sector's performance, with varying degrees of influence depending on the performance metric. Notably, NIM emerges as the most effective metric for evaluating a bank's overall performance, emphasizing the importance of managing interest margins effectively in the Kosovo market. These results have broader implications for discussions on governance structures within financial institutions and policy formulation. In Kosovo's banking sector, corporate governance has become pivotal for operational success and sustainability. This research offers valuable insights for stakeholders and policymakers by analyzing CG practices and their effects on key financial performance metrics.The dataset spans from 2015 to 2022, ensuring a comprehensive assessment of trends and developments within the banking sector. By employing the OLS estimation method, this study sheds light on the intricate relationship between corporate governance practices, financial indicators, and the sector's overall performance. In summary, this research comprehensively explores the interplay between corporate governance practices, financial indicators, and Kosovo's banking sector performance. The identification of NIM as a key performance metric underscores the importance of effective interest margin management. These findings have far-reaching implications, prompting critical discussions on governance structures within Kosovo's financial institutions for policymakers and industry leaders.

Anahtar Kelimeler

Banking, Corporate governance, Banking Industry

Kaynakça

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• AlHares, A., & Ntim, C. (2017). A cross-country study of the effects of institutional ownership on credit ratings. International Journal of Business and Management, 12(8), 80–99.