Published Online:January 2025
Product Name:The IUP Journal of Corporate Governance
Product Type:Article
Product Code:IJCG010125
DOI:10.71329/IUPJCG/2025.24.1.5-31
Author Name:John Mulenga, Kali Charan Sabat and Som Sekhar Bhattacharyya
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:5-31
This study focuses on the internal governance of foreign bank subsidiaries in the Central and Eastern Europe (CEE) region. It uses data from 13 banks listed on Warsaw Stock Exchange (WSE). There are few or no studies examining the internal governance mechanisms in foreign bank subsidiaries in CEE region. The corporate governance literature offers no conclusive evidence on the effect of corporate governance quality on foreign bank subsidiaries in CEE region. The main objective of the study is twofold: first, analyzing the effectiveness and the role of the board of directors in monitoring and advising managers of foreign subsidiaries; and second, examining the impact of corporate governance quality on banks in CEE. It further aims to ascertain whether the results of studies on the quality of governance of local banks agree with those of this study on foreign bank subsidiaries listed on WSE. For econometrical modeling, the study employs Least Squares Dummy Variable (LSDV) and Maximum Likelihood (ML) regression models to estimate the fixed effect model. LSDV method uses ordinary least squares, while ML method gives us estimates of all the individual components.
Over the last half-century, numerous studies have sought to identify and quantify the connection between corporate governance (CG) and firms’ ethical practices (Areneke et al., 2023). Since institutional investors do not have full control over the use of their investments, they rely on several corporate control mechanisms to protect their investments from being exploited by the managers of companies (Hooy et al., 2020).