The role of judicial efficiency in the board size-financial performance nexus: evidence from microfinance institutions

Beatrice Sarpong-Danquah; Michael Adusei; Mamdouh Abdulaziz Saleh Al-Faryan

doi:10.1016/j.ssaho.2023.100584

The role of judicial efficiency in the board size-financial performance nexus: evidence from microfinance institutions

Beatrice Sarpong-Danquah, Michael Adusei^*, Mamdouh Abdulaziz Saleh Al-Faryan

^*Corresponding author for this work

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Abstract

The exact effect of board size on financial performance has remained inconclusive in the empirical literature. We seek to contribute to this literature by assessing the impact of board size on the financial performance of 408 microfinance institutions (MFIs) for 2010 to 2018 financial years. Besides, we explore whether judicial efficiency exerts any significant effect on the board size-performance nexus. Using the System Generalized Method of Moments estimator as the main analytical technique, we observe that board size has a strong negative effect on the financial performance of MFIs in both the short and long run. In addition, the results show that MFIs that operate in an environment where the judicial system is efficient are likely to experience the positive impact of board size on their financial performance.

Original language	English
Article number	100584
Number of pages	12
Journal	Social Sciences and Humanities Open
Volume	8
Issue number	1
DOIs	https://doi.org/10.1016/j.ssaho.2023.100584
Publication status	Published - 16 Jun 2023

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 1 No Poverty
SDG 8 Decent Work and Economic Growth

Keywords

Board size
Financial performance
Judicial efficiency
Microfinance institutions

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10.1016/j.ssaho.2023.100584

1-s2.0-S2590291123001894-mainFinal published version, 605 KBLicence: CC BY-NC-ND

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abstract = "The exact effect of board size on financial performance has remained inconclusive in the empirical literature. We seek to contribute to this literature by assessing the impact of board size on the financial performance of 408 microfinance institutions (MFIs) for 2010 to 2018 financial years. Besides, we explore whether judicial efficiency exerts any significant effect on the board size-performance nexus. Using the System Generalized Method of Moments estimator as the main analytical technique, we observe that board size has a strong negative effect on the financial performance of MFIs in both the short and long run. In addition, the results show that MFIs that operate in an environment where the judicial system is efficient are likely to experience the positive impact of board size on their financial performance.",

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AU - Sarpong-Danquah, Beatrice

AU - Adusei, Michael

AU - Al-Faryan, Mamdouh Abdulaziz Saleh

PY - 2023/6/16

Y1 - 2023/6/16

N2 - The exact effect of board size on financial performance has remained inconclusive in the empirical literature. We seek to contribute to this literature by assessing the impact of board size on the financial performance of 408 microfinance institutions (MFIs) for 2010 to 2018 financial years. Besides, we explore whether judicial efficiency exerts any significant effect on the board size-performance nexus. Using the System Generalized Method of Moments estimator as the main analytical technique, we observe that board size has a strong negative effect on the financial performance of MFIs in both the short and long run. In addition, the results show that MFIs that operate in an environment where the judicial system is efficient are likely to experience the positive impact of board size on their financial performance.

AB - The exact effect of board size on financial performance has remained inconclusive in the empirical literature. We seek to contribute to this literature by assessing the impact of board size on the financial performance of 408 microfinance institutions (MFIs) for 2010 to 2018 financial years. Besides, we explore whether judicial efficiency exerts any significant effect on the board size-performance nexus. Using the System Generalized Method of Moments estimator as the main analytical technique, we observe that board size has a strong negative effect on the financial performance of MFIs in both the short and long run. In addition, the results show that MFIs that operate in an environment where the judicial system is efficient are likely to experience the positive impact of board size on their financial performance.

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KW - Judicial efficiency

KW - Microfinance institutions

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The role of judicial efficiency in the board size-financial performance nexus: evidence from microfinance institutions

Abstract

UN SDGs

Keywords

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