Corporate governance structure, Bank externalities and sensitivity of non-performing loans in Nigeria

Adegboye, Alex and Ojeka, Stephen and Adegboye, Kofo (2020) Corporate governance structure, Bank externalities and sensitivity of non-performing loans in Nigeria. Cogent Economics & finance.

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Abstract

This study highlights the effect of corporate governance structure and bank externalities on non-performing loans in Nigeria covering the period 2009–2017. This study constructs corporate governance index for Nigerian Banks using Principal Component Analysis to establish the influence of corporate governance structure on non-performing loans. This study conducts a panel data analysis using static and dynamic estimators to examine the sensitivity of nonperforming loans and corporate governance structure. From the empirical analysis, corporate governance structure of banks in Nigeria has a negative and significant influence on non-performing loans in Nigerian banks. This result reveals that sound corporate governance structure enhances the loan quality and bank stability. In addition, the study affirms that stringent policy imposed by the bank regulators has a negative impact on non-performing loans. Thus, effective corporate governance mechanism and bank regulations could help to curb excessive risk appetite that could mutilate probable performance and loan.

Item Type:	Article
Uncontrolled Keywords:	corporate governance index; non-performing loans; principal component analysis; bank externalities
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HJ Public Finance
Divisions:	Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User:	Mrs Patricia Nwokealisi
Date Deposited:	02 Jun 2021 15:54
Last Modified:	02 Jun 2021 15:54
URI:	http://eprints.covenantuniversity.edu.ng/id/eprint/14324

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