Board size, social trust, and corporate risk taking: Evidence from China

Kun Su, Heng Liu and Han Zhang

Managerial and Decision Economics, 2019, vol. 40, issue 6, 596-609

Abstract: This paper examines the relationship between board size and corporate risk taking, as well as the moderating effects of regional‐level social trust. Results show that larger boards have greater difficulty in achieving consensus on extreme decisions and thus tend to reduce firm risk taking in a Chinese context. Moreover, social trust had a significant moderating effect on the relationship between board size and corporate risk taking. This study contributes to the risk taking literature by testing the board size‐risk taking linkage in a Chinese context and offering an explanation based on internal board governance and external informal institution heterogeneity.

Date: 2019
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https://doi.org/10.1002/mde.3030

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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:40:y:2019:i:6:p:596-609

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