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Does governance quality affect Tunisian banks’ business strategy performance?
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Monia Chikhaoui 
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This paper examines whether governance quality affects the effectiveness of business strategies in Tunisian banks. Using data from ten commercial banks observed from 2000 to 2021, the study analyzes how internal governance mechanisms influence strategic outcomes such as net banking income (NBI), market share, and credit policy. The results indicate that institutional investors and an effective board structure enhance strategic performance, while excessive control or power concentration reduces flexibility. Bank size and age also significantly affect outcomes, with older banks performing better. Robustness tests reveal a nonlinear effect of governance: moderate governance improves efficiency, but excessive governance becomes restrictive. Unlike earlier studies that report uniformly positive effects of governance, this research highlights a contextual and asymmetric relationship, showing that private banks benefit more from governance improvements than public (state-owned) banks. Finally, depending on whether the strategy is offensive or defensive, governance can vary in ways that support flexible strategic behavior.
Keywords: Bank Strategy, Governance Mechanisms, Offensive, Defensive, Market Share, Net Banking Income, Loan Policy
Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.
Declaration of conflicting interests: The Author declares that there is no conflict of interest.
JEL Classification: G21, G34, L25
Received: 26.08.2025
Revised: 04.11.2025; 17.11.2025; 25.11.2025
Accepted: 08.12.2025
Published online: 10.12.2025
How to cite this paper: Chikhaoui, M. (2025). Does governance quality affect Tunisian banks’ business strategy performance? Corporate Ownership & Control, 22(4), 97–108. https://doi.org/10.22495/cocv22i4art9
