The Relationship between Board Characteristics and Bank Risk-Taking: The Moderating Effects of Market Discipline and Ownership Concentration
DOI:
https://doi.org/10.59573/emsj.7(4).2023.16Ключевые слова:
board characteristics, bank risk-taking, commercial banks, market discipline, ownership concentrationАннотация
The purpose of this paper is to examine the direct impact of board-related characteristics on risk-taking behavior in the banking sector and the moderating effects of market discipline and ownership concentration on the relationship between these characteristics and bank risk-taking. Using data from a sample of Vietnamese commercial banks for the period 2010-2018, we find that, first, there is (partial) evidence of a negative relationship between the presence of female and independent directors and bank risk-taking. Second, the moderating effects of market discipline and ownership concentration are partially supported, providing some evidence of an incremental effect of specific board characteristics on bank risk-taking. In particular, the negative impact of directors’ educational level on risk becomes significant for banks that are listed, while the impact of independent directors is enhanced in banks with high ownership concentration. The large board size also has a negative influence on risk-taking when banks' ownership concentration is high. Our study has implications for corporate governance regulations and policymaking.
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