The influence of corporate governance on changes in risk following the global financial crisis: evidence from the Portuguese stock market

Tiago Miguel Sá (), Elisabete Duarte Neves () and Cristina Gonçalves Góis ()
Additional contact information
Tiago Miguel Sá: Polytechnic Institute of Coimbra
Elisabete Duarte Neves: Polytechnic Institute of Coimbra
Cristina Gonçalves Góis: Polytechnic Institute of Coimbra

Journal of Management & Governance, 2017, vol. 21, issue 4, No 3, 878 pages

Abstract: Abstract This paper examines the influence of corporate governance characteristics on changes in total, market and idiosyncratic risk in the Portuguese capital market following the collapse of Lehman Brothers. We aim to address corporate practices, while determining if corporate governance characteristics can help predict future variations of the risk associated with a certain security and, in this sense, if these characteristics may be used to help monitor or forecast risk of an existing portfolio of securities over time. We find positive and significant changes in total and idiosyncratic risk for non-financial firms listed on Euronext Lisbon, consistent with increases in investor uncertainty during the crisis period. Our results suggest that changes in risk measures over a shorter-term and a longer-term period vary with governance characteristics. The capital market rewarded companies with a greater proportion of non-executive directors and directors that exercise (on average) management roles in more companies or institutions. On the other hand, the capital market punished companies with a greater proportion of independent directors and greater ownership concentration.

Keywords: Financial crisis; Risk; Corporate governance (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s10997-016-9361-5 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:jmgtgv:v:21:y:2017:i:4:d:10.1007_s10997-016-9361-5

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10997/PS2

DOI: 10.1007/s10997-016-9361-5

Access Statistics for this article

Journal of Management & Governance is currently edited by Lino Cinquini

More articles in Journal of Management & Governance from Springer, Accademia Italiana di Economia Aziendale (AIDEA) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().