The study aims to investigate non-linear relationship between corporate governance (CG) and bank performance in the presence of cybersecurity policy.
The study has been conducted using a sample from 423 commercial banks operating in Quadrilateral Security Dialogue (Quad) countries over the period 2018–2023 using a data set of 2,538 firm-year observations. The study uses a kernel estimator (a non-linear test) and a feasible generalized least squares method to conduct the analysis. Further, panel vector autoregression (PVAR) was used to test the endogeneity and robustness of result.
The findings confirm a non-linear interaction effect of cybersecurity policy on relationship between CG and bank performance of Quad countries. The study finds that presence of cybersecurity policy has a negative impact on bank performance, suggesting that costs associated with implementing cybersecurity policy may outweigh its benefits. But interaction effect of CG and cybersecurity policy has a positive marginal effect on bank performance, indicating that good CG in presence of cybersecurity policy can enhance bank performance.
To the best of the authors’ knowledge, this study is the first to analyze the impact of CG on bank performance in presence of cybersecurity policy.
