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Bank ownership structures and sustainable banking initiatives: The moderating effect of governance mechanism

Douglas A. Adu, Abedin Abedin, Mudassar Hasan

International Review of Financial Analysis, Volume: 89, Start page: 102736

Swansea University Author: Abedin Abedin

  • Accepted Manuscript under embargo until: 30th June 2025

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DOI (Published version): 10.1016/j.irfa.2023.102736

Abstract

Bank regulators in the Sub-Saharan Africa (SSA) region are increasingly focusing on effective bank ownership structures (BOS) as a key corporate governance (CG) mechanism to drive sustainable banking disclosures (SBD). However, it is unclear whether BOS can lead to an enhancement in SBD. Understandi...

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Published in: International Review of Financial Analysis
ISSN: 1057-5219 1873-8079
Published: Elsevier BV 2023
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URI: https://cronfa.swan.ac.uk/Record/cronfa64219
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spelling v2 64219 2023-08-31 Bank ownership structures and sustainable banking initiatives: The moderating effect of governance mechanism 4ed8c020eae0c9bec4f5d9495d86d415 Abedin Abedin Abedin Abedin true false 2023-08-31 BAF Bank regulators in the Sub-Saharan Africa (SSA) region are increasingly focusing on effective bank ownership structures (BOS) as a key corporate governance (CG) mechanism to drive sustainable banking disclosures (SBD). However, it is unclear whether BOS can lead to an enhancement in SBD. Understanding these key associations can help policymakers and banks design sustainable strategies to promote SBD. In this study, we fill this gap by investigating the impact of BOS on SBD and determining the extent to which broad CG disclosure moderates this relationship. We conduct a dynamic two-step system generalized method of moments model over an extensive dataset. We demonstrate that the relationship between BOS and SBD is contingent on the quality of the CG mechanisms. Bank ownership by institutions and foreign investors (government) positively (negatively) impacts SBD. Also, there is a negative but insignificant relationship between director ownership and SBD. Finally, the relationship between BOS and SBD is positively moderated by the extent of CG disclosure. This moderating effect improves for banks with quality CG mechanisms. We identify CG disclosure as the possible channel through which BOS and SBD are interlinked. Our findings call for banks to adopt and implement good governance disclosures to improve SBD. Journal Article International Review of Financial Analysis 89 102736 Elsevier BV 1057-5219 1873-8079 Bank ownership structures, Corporate governance, Sustainable banking initiatives, Environmental policy, Stakeholder engagement 31 10 2023 2023-10-31 10.1016/j.irfa.2023.102736 http://dx.doi.org/10.1016/j.irfa.2023.102736 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University 2023-09-26T10:10:46.7412094 2023-08-31T17:17:17.9534415 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Douglas A. Adu 1 Abedin Abedin 2 Mudassar Hasan 3 Under embargo Under embargo 2023-09-26T09:54:25.2390322 Output 1033208 application/pdf Accepted Manuscript true 2025-06-30T00:00:00.0000000 Distributed under the terms of a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0). true eng https://creativecommons.org/licenses/by-nc-nd/4.0/
title Bank ownership structures and sustainable banking initiatives: The moderating effect of governance mechanism
spellingShingle Bank ownership structures and sustainable banking initiatives: The moderating effect of governance mechanism
Abedin Abedin
title_short Bank ownership structures and sustainable banking initiatives: The moderating effect of governance mechanism
title_full Bank ownership structures and sustainable banking initiatives: The moderating effect of governance mechanism
title_fullStr Bank ownership structures and sustainable banking initiatives: The moderating effect of governance mechanism
title_full_unstemmed Bank ownership structures and sustainable banking initiatives: The moderating effect of governance mechanism
title_sort Bank ownership structures and sustainable banking initiatives: The moderating effect of governance mechanism
author_id_str_mv 4ed8c020eae0c9bec4f5d9495d86d415
author_id_fullname_str_mv 4ed8c020eae0c9bec4f5d9495d86d415_***_Abedin Abedin
author Abedin Abedin
author2 Douglas A. Adu
Abedin Abedin
Mudassar Hasan
format Journal article
container_title International Review of Financial Analysis
container_volume 89
container_start_page 102736
publishDate 2023
institution Swansea University
issn 1057-5219
1873-8079
doi_str_mv 10.1016/j.irfa.2023.102736
publisher Elsevier BV
college_str Faculty of Humanities and Social Sciences
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hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
url http://dx.doi.org/10.1016/j.irfa.2023.102736
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description Bank regulators in the Sub-Saharan Africa (SSA) region are increasingly focusing on effective bank ownership structures (BOS) as a key corporate governance (CG) mechanism to drive sustainable banking disclosures (SBD). However, it is unclear whether BOS can lead to an enhancement in SBD. Understanding these key associations can help policymakers and banks design sustainable strategies to promote SBD. In this study, we fill this gap by investigating the impact of BOS on SBD and determining the extent to which broad CG disclosure moderates this relationship. We conduct a dynamic two-step system generalized method of moments model over an extensive dataset. We demonstrate that the relationship between BOS and SBD is contingent on the quality of the CG mechanisms. Bank ownership by institutions and foreign investors (government) positively (negatively) impacts SBD. Also, there is a negative but insignificant relationship between director ownership and SBD. Finally, the relationship between BOS and SBD is positively moderated by the extent of CG disclosure. This moderating effect improves for banks with quality CG mechanisms. We identify CG disclosure as the possible channel through which BOS and SBD are interlinked. Our findings call for banks to adopt and implement good governance disclosures to improve SBD.
published_date 2023-10-31T10:10:48Z
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