Do US Corporate Governance Standards Effectively Discourage Risk in the Emerging Markets?

Date

2018-06-01

Author

Sayari, Naz
Marcum, Bill

Metadata

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This study provides an examination of the effect of various corporate governance factors on the management of the risks inherent in business and the potential divergent impact of these factors on US firms and firms in emerging countries. In particular, the study scrutinises corporate governance and corporate risk-taking behaviour across different political and socioeconomic environments. In a cross-sectional time-series setting, two-step generalised least squares regression outcomes reveal that the impact of corporate governance on corporate risk taking demonstrates similar implications for US and emerging markets firms in several ways. Nonetheless, the findings also indicate that although some of the US governance standards are effective in the emerging markets, further strengthening of governance standards may be required. Specific governance aspects of the emerging markets, such as board and committee composition, are still lacking when compared to those of the US. Regardless of these differences, the outcomes reveal that those US governance standards adopted by the firms in the emerging markets strengthen governance structures and discourage corporate risk-taking behaviour.

Subject Keywords

Valuation, Ownership, Committees, Management, Investment, Impact, Compensation, Directors, Firm performance, Board composition

URI

https://hdl.handle.net/11511/66078

Journal

AUSTRALIAN ACCOUNTING REVIEW

DOI

https://doi.org/10.1111/auar.12160

Collections

Department of Business Administration, Article

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Citation Formats

N. Sayari and B. Marcum, “Do US Corporate Governance Standards Effectively Discourage Risk in the Emerging Markets?,” AUSTRALIAN ACCOUNTING REVIEW, pp. 167–185, 2018, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/66078.