Corporate governance practices and corporate growth

Abstract

In order to guarantee the stability, accountability, and transparency of commercial banks, corporate governance is an essential component of the banking sector. The study attempts to examine the impact of corporate governance on corporate growth of Nepalese commercial banks. This study primarily employs a descriptive and causal research strategy for data analysis in order to determine the impact of various factors on the corporate governance and corporate growth of Nepalese commercial banks. This study is based on the secondary data gathered from 12 Nepalese commercial banks for the study period from 2014/15 to 2023/24. The obtained data is provided in an ordered format in Eviews software, and the descriptive statistics, correlation analysis, and regression analysis results have been calculated and displayed.

The relationship analysis found that earnings per share of the banks positively associated with board size of the banks. Similarly, earnings per share of the banks negatively associated with board gender diversification of the banks. In the same way, earnings per share of the banks negatively associated with board independence of the banks. In contrast earnings per share of the banks positively associated with audit committee of the banks. However, earnings per share of the banks negatively associated with company size of the banks. On the other hand, earnings per share of the banks positively associated with financial leverage of the banks. On the other hand, earnings per share of the banks positively associated with bank age. Another correlation results revealed that market capitalization of the banks negatively associated with board size of the banks. On the other hand, market capitalization of the banks positively associated with board gender diversification of the banks. Moreover, market capitalization of the banks negatively associated with board independence of the banks. In contrast, market capitalization of the banks negatively associated with audit committee of the banks. However, market capitalization of the banks positively associated with company size of the banks. On the other hand, market capitalization of the banks negatively associated with financial leverage of the banks. On the other hand, market capitalization of the banks positively associated with bank age of the banks.

Keywords: Corporate governance, corporate growth, earnings per share and market capitalization