Title: Non-performing loans and bank corporate governance: conceptual framework and literature review

Authors: Ameni Tarchouna; Bilel Jarraya; Abdelfettah Bouri

Addresses: Research Laboratory Governance, Finance and Accounting, Faculty of Economics and Management, Sfax University, Sfax, Tunisia ' Department of Accounting, College of Business and Economics, Qassim University, P.O. Box. 6640, Buraidah 51452, Saudi Arabia; Research Laboratory Governance, Finance and Accounting, Faculty of Economics and Management, Sfax University, Sfax, Tunisia ' Faculty of Economics and Management, Sfax University, Sfax, Tunisia

Abstract: This paper aims to accurately distinguish non-performing loans (NPLs) notion from some related concepts and provides the theoretical background and empirical literature review of these loans. This displays bank efficiency studies which consider bad loans and reports previous researches on NPLs determinants. Banks' efficiency studies have empirically proven the direct effect of bad loans on banks' production process. Researches on NPLs factors have shown that these loans are affected by both macroeconomic and bank-specific determinants. Moreover, loan quality can be influenced by bank corporate governance (CG). But, this remains implicitly studied though the apparent failures and weaknesses in CG. Thus, we cite the few studies which examine the influence of CG on bank loan quality. To do so, we state the CG theories and discuss the special features distinguishing banks from non-financial institutions. This review represents an historical record for researchers who aim to examine NPLs topic in the future.

Keywords: non-performing loans; bank efficiency; corporate governance; global financial crisis.

DOI: 10.1504/IJBGE.2021.116534

International Journal of Business Governance and Ethics, 2021 Vol.15 No.3, pp.233 - 265

Accepted: 03 Apr 2020
Published online: 27 Jul 2021 *

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