Is the Journey More Important than the Destination? EU Accession and Corporate Governance and Performance of Banks

This paper examines how accession to and subsequent membership of the European Union (EU) has influenced the dissemination of corporate governance characteristics and financial performance of the banking industry. Using a hand-collected, cross-national dataset from EU member and candidate states the analysis indicates the candidacy period is associated with the better financial performance of banks than the latter period of EU membership. EU membership also has a significant negative influence on the take up some corporate governance arrangements. We infer this result is consistent with instrumental rationality explanations of Europeanization. While the process of accession has brought benefits, these are not always reinforced by subsequent EU membership.