Role of Controlling Shareholders on the Performance of Efficient African Banks.

This study aims to investigate the moderating role of controlling shareholders on the relationship between bank efficiency and bank performance by considering a sample of 298 African banks for the 2006–2015 period. We use panel corrected standard error of Beck and Katz with robust standard error and country effect clustered. Our findings reveal three important findings. First, efficiency has a positive relationship with performance. Second, family-owned and foreign-owned banks have outperformed their peers. Third, there is a moderating effect of controlling shareholders on the bank efficiency–performance nexus; however, the moderating effect is small. Our findings support the alignment hypothesis of agency theory. Practitioners should consider controlling shareholders in examining the performance of efficient banks.