Abstract
Banking is a risk-taking industry and its performance ought to be appraised by including risk- taking as a prime consideration in
the overall framework. Major objectives of both the Islamic and conventional banks are same. What distinguishes both types of
banking are the way these banks pursue to achieving their goals and particular objectives. This study explores relationship of
corporate governance with the performance of Islamic and conventional banks by using moderating effect of risk-taking. It aims at
finding any difference in the impact of governance and risk taking in banks of two Islamic countries: Malaysia and Pakistan. Our
sample consists of eighteen banks from Pakistan and Malaysia which include three Islamic banks and five conventional banks of
Pakistan while five Islamic banks and five conventional banks from Malaysia.
In Islamic banks, results show that firm size has significant relation with performance in terms of return on assets (ROA). Though
effect of Corporate Governance (CG) is insignificant on performance (ROA) but it has significant impact on performance with
moderating role of risk in Islamic banks whereas CGI have insignificant relation with performance measure ROE. In Conventional
banks, CGI has insignificant impact on performance (ROA) of conventional banks even with moderating effect of risk while CGI
has significant effect on ROE with moderating effect of risk. This study provides new insights to management of Islamic and
conventional banks that how they can manage risk in managing each type of banks
Allah Bakhsh, Misbah Akram, Shoaib Aslam, Mumtaz Ahmad. (2020) Corporate Governance, Risk-Taking and Financial Performance of Islamic and Conventional Banks: Evidence from Pakistan and Malaysia, Paradigms , Vol 14, Issue .
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