Linkage between Corporate Governance and Financial Performance in an Emerging Economy

Md. Saiful Islam Chowdhury, Farhana Ferdous, MD. Omar Faruk

The objective of this study is to explore the Linkage between Corporate Governance and Financial Performance in an Emerging Economy in the banking sector of Bangladesh. The data have been taken from primary sources. Data were collected from 22 listed banks on the Dhaka Stock Exchange (DSE). This data were analyzed by using different statistical tools like structural equation model (SEM) with the help of SmartPLS-3 software. It is found that some important factors like enablers that improve corporate governance, obstacles that affect corporate governance; those are the influential factors to build performance of selected bank. This study further supports the argument that when bank implement good corporate governance principles, it experiences improved financial performance. This study, with its emphasis on developing a corporate governance model, makes a significant contribution to the body of knowledge on corporate governance in emerging economies like Bangladesh.