Corporate governance and risk-taking: Evidence from Japanese firms

Publisher:
Elsevier Inc
Publication Type:
Journal Article
Citation:
Pacific-Basin Finance Journal, 2011, 19 (3), pp. 278 - 297
Issue Date:
2011-01
Full metadata record
Files in This Item:
Filename Description Size
Thumbnail2010002445OK.pdfPublished Version227.65 kB
Adobe PDF
This paper examines the influence of corporate governance on the risk taking of Japanese firms. We show that family control and ownership concentration are associated with higher idiosyncratic risk, whereas bank control has the opposite effect. Considering the link between idiosyncratic risk and firm performance, the results provide an economic rationale for the higher (lower) performance of familycontrolled firms (bank-controlled firms). The results also explain the higher performance of firms with concentrated ownership by relating their governance structures to the risk-taking strategies that generate greater competitive advantages. Finally, we show that the impact of governance structures on risk taking is stronger after controlling for endogeneity.
Please use this identifier to cite or link to this item: