Effect of the legal system country of European commercial banks on the financial distress

  • Authors

    • Nizar Baklouti Department of Finance and Accounting, Faculty of Economics and Management of Sfax (FSEGS), Tunisia
    • Frédéric Gautier Professor of management, IAE Sorbonne Business School, University of Paris I Sorbonne.
    • François Aubert Professor of financial Accounting , IAE Orleans Business School, Orleans University
    2016-11-26
    https://doi.org/10.14419/ijaes.v4i2.6839
  • , Corporate Governance, Financial Distress, Bank, Board, Investor Protection.

  • Abstract

    This study examines the effect of the legal system on the governance of banks and hence on financial distress. We compare corporate governance to the legal system in 18 countries of the European Union to explain the relationship between financial distress and bank governance. Using a sample of 147 commercial banks, we find that the effect of the legal system really counts. The results also suggest that banks operating in common law and civil law countries tend the concentration of ownership and board size to the effect of increasing the likelihood of financial distress. This study contributes to research in the governance of enterprise to provide empirical evidence that the legal system has the power to influence the financial health of banks.

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  • How to Cite

    Baklouti, N., Gautier, F., & Aubert, F. (2016). Effect of the legal system country of European commercial banks on the financial distress. International Journal of Accounting and Economics Studies, 4(2), 168-173. https://doi.org/10.14419/ijaes.v4i2.6839

    Received date: 2016-10-05

    Accepted date: 2016-11-17

    Published date: 2016-11-26