Market risk disclosures and corporate governance structure: Evidence from GCC financial firms

Ahmed Al-Hadi, Khamis Hamed Al-Yahyaee, Syed Mujahid Hussain and Grantley Taylor

The Quarterly Review of Economics and Finance, 2019, vol. 73, issue C, 136-150

Abstract: In this study, we examine the relationship between corporate governance and the disclosure of market risk among financial firms from the Gulf Cooperation Council (GCC) region between 2007 and 2011. Using a comprehensive measure of the disclosure of market risk, our regression results suggest that the level of market risk disclosure is positively and significantly associated with the strength of a firm’s corporate governance structure. Economically, the regression coefficient implies that a 3.25% increase in market risk disclosures is associated with a one standard deviation change in the strength of corporate governance. In addition, when we decompose our corporate governance index into its constituent items, we find that directors’ independence and the dual roles of the CEO and chairman of the board reduce the extent and quality of market risk disclosures. Our results are robust to alternative specifications and endogeneity tests.

Keywords: Market risk disclosures; Corporate governance; GCC (search for similar items in EconPapers)
JEL-codes: D72 J16 M40 M41 M48 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:73:y:2019:i:c:p:136-150

DOI: 10.1016/j.qref.2017.11.008

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