Work

Corporate Governance and Risk‐Taking

Year: 2008

Type: article

Abstract: ABSTRACT Better investor protection could lead corporations to undertake riskier but value‐enhancing investments. For example, better investor protection mitigates the taking of private benefits leading to excess risk‐avoidance. Further, in better investor protection environments, stakeholders like creditors, labor groups, and the government are less effective in reducing corporate risk‐taking for their self‐interest. However, arguments can also be made for a negative relationship between investor protection and risk‐taking. Using a cross‐country panel and a U.S.‐only sample, we find that corporate risk‐taking and firm growth rates are positively related to the quality of investor protection.

Source: The Journal of Finance

DOI: 10.1111/j.1540-6261.2008.01372.x

Authors: KOSE JOHN, LUBOMIR LITOV, BERNARD YEUNG

Institutions: New York University, National University of Singapore, Washington University in St. Louis

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Decent work and economic growth

Open Access status: green

OpenAlex ID: W3123055067

FWCI: 40.85

Cites: 84

Cited by: 1,833

Related to: 10