EconPapers    
Economics at your fingertips  
 

Does corporate governance quality affect default risk? The role of growth opportunities and stock liquidity

Searat Ali, Benjamin Liu and Jen Je Su

International Review of Economics & Finance, 2018, vol. 58, issue C, 422-448

Abstract: A series of defaults, a distinctive corporate environment and inconclusive findings in literature make Australia an interesting case in which to investigate the association between corporate governance and default risk. Using a large panel of 1086 non-financial firms from 2001 to 2013, we find that better governed firms are strongly associated with a lower level of default risk, and that the association is stronger among firms with more growth opportunities. Moreover, empirical evidence supports the role of stock liquidity as a channel of the relationship. Overall these findings have practical implications for the stakeholders in Australia.

Keywords: Corporate governance; Default risk; Growth opportunities; Stock liquidity; Heterogeneity analysis; Channel (search for similar items in EconPapers)
JEL-codes: G01 G33 G34 G38 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (43)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056017307554
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:58:y:2018:i:c:p:422-448

DOI: 10.1016/j.iref.2018.05.003

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-19
Handle: RePEc:eee:reveco:v:58:y:2018:i:c:p:422-448