Risk Disclosure and Company Unsystematic, Systematic, and Total Risks
Ousayna Zreik () and
Wael Louhichi ()
Additional contact information
Ousayna Zreik: ESC Rennes School of Business
Wael Louhichi: ESSCA SCHOOL OF MANAGEMENT
Economics Bulletin, 2017, vol. 37, issue 1, 448-467
Recently, researchers have largely studied the impact of risk communication on several factors. In this paper, we examine the association between the communication about risk through annual reports and unsystematic, systematic, and total risks. We use the content analysis method to measure risk communication and the market model to measure the three types of risk. We find that increased risk disclosure is associated with decreased unsystematic and total risks and increased systematic risk. Two complementary analyses are performed. The first of these analyses examines the impact of risk communication on company risks before, during and after the financial crisis of 2008. The second analysis distinguishes high-risk from low-risk companies. The results reveal that the impact of risk communication on company risks depends on estimated period (pre-crisis, during crisis or post-crisis). Moreover, we observe that low-risk companies reduce their risk level through more risk communication.
Keywords: Risk disclosure; annual report; content analysis; systematic risk; unsystematic risk (search for similar items in EconPapers)
JEL-codes: G3 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-16-00531
Access Statistics for this article
More articles in Economics Bulletin from AccessEcon
Series data maintained by John P. Conley ().