Governance mechanisms and downside risk

Li-Hsun Wang, Chu-Hsiung Lin, Hung-Gay Fung and Hsien-Ming Chen

Pacific-Basin Finance Journal, 2015, vol. 35, issue PB, 485-498

Abstract: This study uses data for Taiwanese firms from 2002 to 2012 to investigate the relation between corporate governance and downside risk. Our results show that good corporate governance reduces downside risk while increasing firm value. That is, firms with high managerial ownership, market power, and independent boards appear to have lower downside risk, likely because their decision-making is more transparent than that of firms without these characteristics.

Keywords: Corporate governance; Downside risk; Value-at-risk (VaR); Expected shortfall (search for similar items in EconPapers)
JEL-codes: G32 G34 G38 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:35:y:2015:i:pb:p:485-498

DOI: 10.1016/j.pacfin.2015.09.001

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