Corporate Governance Performance Relationship and the Role of Institutions and Culture: New Evidence from Asian Microfinance Institutions

  • Ahmad Nawaz Department of Economics, COMSATS University Islamabad, Lahore Campus, Pakistan
  • Sidra Shahbaz MPhil Scholar, COMSATS University Islamabad, Lahore Campus, Pakistan
  • Abdul Farooq Department of Economics, COMSATS University Islamabad, Lahore Campus, Pakistan
  • Muhammad Masood Anwar Assistant Professor at women university of Azad Jammu Kashmir, Bagh, Pakistan
Keywords: Microfinance, Corporate Governance, Performance, Culture, Institutions


Purpose: In a globalized world today, Microfinance Institutions (MFIs) are concerned about their corporate governance mechanism to enhance financial and social performance. However, it largely depends on the existing institutional, cultural and economic factors. This paper furthers the debate on the impact of corporate governance on the financial and social performance of Microfinance Institutions (MFIs) in Asian Context.

Design/Methodology/Approach: The paper utilizes a panel cross-country data set comprised of 183 MFIs in 18 Asian countries over the period of 2010-2018. For empirical analysis, it applies GMM regression technique to control for the endogeniety issue.   

Findings: The results show that generally corporate  governance mechanism contributes more  towards  social  performance  of  MFIs  than  the  financial  performance and a conducive institutional environment enhances both financial and social performance. However, good cultural and economic values contribute only towards the social performance of MFIs.

Implications/Originality/Value: Since majority of MFIs irrespective of their status are socially oriented. Therefore, good corporate governance mechanism is more effective in enhancing social performance in particular. Progress towards human development contributes to both financial and social performance of MFIs.


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How to Cite
Nawaz, A., Shahbaz, S., Farooq, A., & Anwar, M. M. (2021). Corporate Governance Performance Relationship and the Role of Institutions and Culture: New Evidence from Asian Microfinance Institutions. Journal of Accounting and Finance in Emerging Economies, 7(3), 537-551.