Corporate governance and risk-taking

• 成果类型: Article
• 署名作者: John, Kose; Litov, Lubomir; Yeung, Bernard
• 署名单位: New York University; Washington University (WUSTL); National University of Singapore
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2008.01372.x
• 发表日期: 2008
• 页码: 1679-1728
• 关键词: investor protection; capital allocation; financial-markets; OWNERSHIP; GROWTH; LAW; diversification; incentives; volatility; price

摘要

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.