Foreign investors and corporate risk taking behavior in an emerging market

2016 ◽  
Vol 18 ◽  
pp. 273-277 ◽  
Author(s):  
Xuan Vinh Vo
Keyword(s):  
Risk Taking ◽  
Emerging Market ◽  
Foreign Investors ◽  
Risk Taking Behavior ◽  
Corporate Risk

Corruption and corporate risk-taking: evidence from emerging markets

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Quoc Trung Tran
Keyword(s):  
Emerging Markets ◽  
Risk Taking ◽  
Information Disclosure ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Content Type ◽  
Financing Cost ◽  
Market Index ◽  
Public Enemy ◽  
Corporate Risk

PurposeThis paper investigates the relationship between corruption and corporate risk-taking in emerging markets where corruption is considered as “public enemy number one.”Design/methodology/approachThe study measures corruption based on Corruption Control Index annually published by World Bank and examines how corruption affects corporate risk-taking in emerging markets covered in MSCI Emerging Market Index.FindingsWith a sample of 75,338 observations from 8,326 firms across 20 emerging stock markets during the period 2005–2016, the author finds that corruption negatively affects corporate risk-taking. Robustness checks with a reduced sample without China and India, alternatives of corruption measures, various measures of risk-taking and Generalized method of moments (GMM) estimator also show consistent results. Moreover, additional analysis shows that information disclosure mitigates the effect of corruption on risk-taking.Originality/valueThe extant literature implies that corruption may decrease corporate risk-taking behavior through two channels including operational cost and debt financing cost.

scholarly journals Capital Flows and Bank Risk-Taking Behavior: Evidence From Indonesia

2020 ◽  
Vol 9 (s1) ◽  
pp. 33-53
Author(s):  
Bayront Yudit Rumondor ◽  
Pakasa Bary
Keyword(s):  
Risk Taking ◽  
Capital Flows ◽  
Emerging Market ◽  
Capital Inflows ◽  
Bank Risk ◽  
Portfolio Investment ◽  
Industry Level ◽  
Country Level ◽  
Risk Taking Behavior ◽  
The Impact

AbstractThis paper investigates the impact of capital flows on bank risk-taking behavior. It undertakes two levels of empirical estimations, namely (i) single-country industry-level; and (ii) multi-country industry-level estimations, covering emerging market economies. The results suggest that capital inflows, in the form of portfolio investment, is significant in raising risk-taking behavior. Large banks are less aggressive in their risk-taking behavior vis-à-vis smaller banks. Such impact of portfolio investment on risk-taking behavior is also shown in the multi-country level estimates.

The performance and corporate risk-taking of firms: evidence from Malaysian agricultural firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hanis Hazwani Ahmad ◽  
Adilah Azhari
Keyword(s):  
Firm Performance ◽  
Risk Taking ◽  
Agricultural Sector ◽  
Management Practice ◽  
Emerging Market ◽  
Random Effect ◽  
Least Square ◽  
Content Type ◽  
Agriculture Sector ◽  
Corporate Risk

PurposeThis study explores the effects of the performance and corporate risk-taking behaviour of agricultural firms. Despite its importance in mitigating climate change, the agricultural sector also faces global competition, market liberalisation, rapid technological advances and the starter of stricter quality and safety procedures, all of which require firms to take greater risks.Design/methodology/approachThis study explores this relationship by applying generalised least square (GLS), random effect methodologies (REM) and generalised method of moments (GMM).FindingsThe findings report a favourable relationship between firm performance and corporate risk-taking using a sample of firms from an emerging market.Research limitations/implicationsThe effects of these results for management practice and recommendations for further research were examined.Originality/valueWhile this empirical study used a sample focused on a single industry, most previous studies focused on multiple industries. The originality of this study is its analysis of how firm performance affects corporate risk-taking in the Malaysian agriculture sector.

Role of Institutional Owners in Devising Firms' Risk-Taking Behavior

2018 ◽  
Vol 7 (4) ◽  
pp. 21-36 ◽  
Author(s):  
Mian Sajid Nazir ◽  
Sadaf Nazir ◽  
Aisha Javaid
Keyword(s):  
Risk Taking ◽  
Low Cost ◽  
Emerging Market ◽  
Institutional Ownership ◽  
Strategic Decision ◽  
Positive Role ◽  
Market Positioning ◽  
Risk Taking Behavior ◽  
Institutional Owners

Role of institutional owners is becoming vital regarding strategic decision making in modern day business corporations. Financial institutions are capable to monitor the empowered company insiders and to regulate the capital market positioning of firms due to their specialized expertise and low cost of monitoring the managers. This article is an attempt to investigate the role of institutional owners on firms' risk-taking behavior in an emerging market. By using the sample of 58 non-financial firms listed at Karachi Stock Exchane-100 (KSE-100) index for a period of 2010 to 2017, these results revealed that institutional ownership can influence firms risk taking decisions. This influence depends on type of institutional ownership; passive owners play negative role in risk taking while active owners play a positive role in risk taking. Size of institutional ownership does not matter in risk taking.

scholarly journals State Ownership and Risk-Taking Behavior: An Empirical Approach to Get Better Profitability, Investment, and Trading Strategies for Listed Corporates in Vietnam

Economies ◽  
2020 ◽  
Vol 8 (2) ◽  
pp. 46
Author(s):  
Tran Thai Ha Nguyen ◽  
Massoud Moslehpour ◽  
Thi Thuy Van Vo ◽  
Wing-Keung Wong
Keyword(s):  
Risk Taking ◽  
Dominant Role ◽  
Generalized Method Of Moments ◽  
Trading Strategy ◽  
State Ownership ◽  
Trading Strategies ◽  
Risk Appetite ◽  
Risk Taking Behavior ◽  
Corporate Risk ◽  
The Impact

Corporate risk-taking behavior and investment is a crucial factor in order to seek higher profits and a better trading strategy. Competitive advantage and innovation, while maintaining profitability and state ownership, are considered as crucial resources. Furthermore, it is essential to connect the short-term and long-term business and investment objectives plus stakeholder’s expectations to corporate sustainability and development. This connection is especially important in the context of transforming economies and getting better trading strategies. This study estimates the relationship between state ownership, profitability, corporate risk-taking behavior, and investment in Vietnam by using Generalized Method of Moments (GMM) methods. Using the data of 501 listed non-financial corporates during the period 2007–2015 from Ho Chi Minh City and Hanoi Stock Exchanges, we find that profitability is determined as a factor to reduce corporate risk-taking acceptance caused by the chances of entrenchment. Meanwhile, the impact of state ownership on the risk appetite of corporate has a non-linear effect. In particular, state ownership reduces corporate risk-taking behavior and investment but yet increases the risk-taking behavior and investment when the state ownership rate exceeds a threshold. One the one hand, this implies that the low level of state ownership not only prevents risk-taking behavior and investment but also results in more severe agency problems, causing unsustainability due to the imbalance of interests among various stakeholders. On the other hand, a dominant role of state ownership concentration causes a boost in corporate risk-taking decision-making in investment and trading strategy, leveraging the connection of significant external resources to deal with uncertain problems. The study contributes to existing theories of corporate governance in the context of a socialist-oriented market.

Role of Institutional Owners in Devising Firms' Risk-Taking Behavior

2020 ◽  
pp. 1716-1732
Author(s):  
Mian Sajid Nazir ◽  
Sadaf Nazir ◽  
Aisha Javaid
Keyword(s):  
Risk Taking ◽  
Low Cost ◽  
Emerging Market ◽  
Institutional Ownership ◽  
Strategic Decision ◽  
Positive Role ◽  
Market Positioning ◽  
Risk Taking Behavior ◽  
Institutional Owners

Role of institutional owners is becoming vital regarding strategic decision making in modern day business corporations. Financial institutions are capable to monitor the empowered company insiders and to regulate the capital market positioning of firms due to their specialized expertise and low cost of monitoring the managers. This article is an attempt to investigate the role of institutional owners on firms' risk-taking behavior in an emerging market. By using the sample of 58 non-financial firms listed at Karachi Stock Exchane-100 (KSE-100) index for a period of 2010 to 2017, these results revealed that institutional ownership can influence firms risk taking decisions. This influence depends on type of institutional ownership; passive owners play negative role in risk taking while active owners play a positive role in risk taking. Size of institutional ownership does not matter in risk taking.

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