TITLE:
The Impact of Corporate Governance and Financial Leverage on the Performance of Local Thai Banks Using Corporate Social Responsibility as a Mediator
AUTHORS:
Aamir Sarwar, Mamdouh Abdulaziz Saleh Al-Faryan, Sara Saeed
KEYWORDS:
Corporate Governance, Corporate Social Responsibility, Leverage, Financial Performance, Endogeneity, Financial Institutions, Ordinary Least Square, Two Stage Least Square
JOURNAL NAME:
Theoretical Economics Letters,
Vol.12 No.1,
January
19,
2022
ABSTRACT: The study looks at the impact of Corporate
Governance on the financial performance of seven Thai banks for the period from
2009 to 2018, and also focused on the relationship between corporate
governance, leverage, financial performance and Corporate Social Responsibility
(CSR) as a mediating variable. Corporate governance was observed through seven
variables. Financial performance was measured through three ratios.
Relationship between Independent Variables and Dependent Variables was verified
through CSR as a mediator. Ordinary Least Square and Two Stage
Least Square were used to determine the relationship between the variables.
Using Hausman test it was found that Random Effect model was the suitable
model. Few of our independent variables were having endogeneity so in order to
have stable results we used Two Stage Least Square Method instead of ordinary
least square. The study
also shows the hidden significance of many relationships. Different
statistical tools used for data analysis include MS-Excel, SPSS-23.0, STATA-16,
Eviews-10 and Smart-PLS 3.0. This study will help the management of Thai banks
to work on the different aspects of Corporate Governance and strategize CSR
which can result in improvement of the
financial performance. The result will also be helpful for the bank management and policy makers. The data of banks was collected from the Annual
reports available online. We could not find any similar study on Thai local
banks. This may be the first study on local banks and may contribute towards
the literature related to the Corporate Governance.