Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

Simultaneity among Market Risk Taking, Bank Disclosures and Corporate Governance: Empirical Evidence from the Banking Sector of Bangladesh

Author(s): Niluthpaul Sarker, Md. Jamil Sharif

The operational premises of the banking sector of Bangladesh are restrained by the strong governance system which controls the unusual fluctuations of banking profit. The study showed the simultaneous relationship among market risk taking, bank disclosures and corporate governance relying on panel data of thirty-two (32) commercial banks for the period of 2006-2016. The study addressed the problem of endogeneity, heteroskedasticity and auto-correlation by selecting the two-stage-least-square (2SLS) method in data analysis. The study argues in favor of good governance system which can ensure bank transparency and market stability. The study reveals that banks disclosures and corporate governance have a significant effect on market risk-taking behavior and also found a reciprocal effect in case of disclosure model and governance model.

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