The moderating effect of corporate governance on the relationship between government intervention and bank performance: a proposed conceptual framework

Abstract

The global financial crisis (GFC) of the last decade has placed enormous pressure on national governments to intervene in the banking sector crises. However, the empirical literature is inconclusive on what an optimal government intervention program should be applied to identifies the areas of improvement that can be addressed by managerial decisions or policy activities to mitigate the consequences of the banking sector crises. The purpose of this study is to propose a conceptual framework that will investigate the moderating effect of corporate governance between government intervention and the performance of the banking sector. This framework will apply a technique that will identify the areas of improvement that can be addressed by managerial decisions or regulatory authorities, by extending the application of partial least squares structural equation modeling (PLS-SEM) using an importance-performance map analysis (IPMA) to determine the priority factors that should receive management’s attention. Therefore, these have prompted scholars, experts, and authorities to re-examine the relationship between government intervention and the performance of the banking sector, which could be used by banks and other regulatory bodies. Furthermore, a recommendation for future research in this area also suggested.