Does good board governance reduce idiosyncratic risk in emerging markets? Evidence from China

IF 2.9 3区经济学 Q2 BUSINESS, FINANCE

Journal of Multinational Financial Management Pub Date : 2022-09-01 DOI:10.1016/j.mulfin.2022.100749

Zeeshan Fareed , Nianyong Wang , Farrukh Shahzad , Syed Ghulam Meran Shah , Najaf Iqbal , Bushra Zulfiqar

引用次数: 7

Abstract

This study examines the impact of board governance on idiosyncratic risk in the context of Chinese listed firms. Contrary to previous evidence from developed markets, we show that good board governance significantly reduces idiosyncratic risk in China. We also show that non-state-owned and foreign firms are relatively more capable of minimizing idiosyncratic risk than are state-owned and private firms. The empirical results obtained from CAPM are not sensitive to alternative proxies of idiosyncratic risk. We also find a significantly stronger impact of board governance on idiosyncratic risk after controlling for endogeneity and performing a sensitivity analysis. Our findings provide valuable insights into firm risk-taking behaviour in emerging markets.

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良好的董事会治理能降低新兴市场的特殊风险吗?来自中国的证据

本研究考察了中国上市公司董事会治理对特质风险的影响。与之前来自发达市场的证据相反，我们表明，良好的董事会治理显著降低了中国的特殊风险。我们还表明，非国有企业和外资企业相对而言比国有企业和民营企业更有能力将特质风险最小化。从CAPM得到的实证结果对特殊风险的替代指标不敏感。在控制内生性并进行敏感性分析后，我们还发现董事会治理对特质风险的影响显著增强。我们的研究结果为了解新兴市场企业的冒险行为提供了有价值的见解。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Multinational Financial Management BUSINESS, FINANCE-

CiteScore

7.30

自引率

4.80%

发文量

审稿时长

30 days

期刊介绍： International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations have become increasingly multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have developed policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available. The purpose of the Journal of Multinational Financial Management is to publish rigorous, original articles dealing with the management of the multinational enterprise. Theoretical, conceptual, and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • Foreign exchange risk management • International capital budgeting • Forecasting exchange rates • Foreign direct investment • Hedging strategies • Cost of capital • Managing transaction exposure • Political risk assessment • International working capital management • International financial planning • International tax management • International diversification • Transfer pricing strategies • International liability management • International mergers.