Political Corruption and Corporate Risk-Taking

被引:6
|
作者
Khieu, Hinh [1 ]
Nguyen, Nam H. [2 ]
Phan, Hieu, V [3 ]
Fulkerson, Jon A. [4 ]
机构
[1] Prairie View A&M Univ, Prairie View, TX 77446 USA
[2] Univ Texas Rio Grande Valley, Robert C Vackar Coll Business Sr Entrepreneurship, 1201 W Univ Dr, Edinburg, TX 78539 USA
[3] Univ Massachusetts Lowell, Manning Sch Business, 72 Univ Ave, Lowell, MA 01854 USA
[4] Univ Dayton, Dept Econ & Finance, Sch Business Adm, 300 Coll Pk, Dayton, OH 45469 USA
关键词
Political corruption; Risk-taking; Systematic risk; Idiosyncratic risk; Investment; Capital structure; Liquidity; Operating leverage; COMPETITION; IMPACT; CONNECTIONS; INVESTMENT; INCENTIVES; MANAGEMENT; GOVERNANCE; INNOVATION;
D O I
10.1007/s10551-022-05136-8
中图分类号
F [经济];
学科分类号
02 ;
摘要
We use variation in corruption convictions across judicial districts in the US to examine the relationship between political corruption and risk-taking of public firms. Firms headquartered in regions with high levels of political corruption have lower total risk and lower idiosyncratic risk on average. Further analysis shows that corruption tends to encourage firms to pursue risk-decreasing investments, lower the riskiness of their operations, and decrease asset liquidity. While managerial ownership is intended to align the interests of managers and shareholders, the presence of corruption appears to encourage undiversified managers to decrease risk-taking. Our evidence is consistent with agency theory and the asset-shielding argument that political corruption discourages managers from taking risks that expose firms to expropriation by politicians, resulting in suboptimal corporate policies.
引用
收藏
页码:93 / 113
页数:21
相关论文
共 50 条
  • [31] MISALIGNMENT: CORPORATE RISK-TAKING AND PUBLIC DUTY
    Schwarcz, Steven L.
    NOTRE DAME LAW REVIEW, 2016, 92 (01) : 1 - 50
  • [32] Industrial robots and corporate risk-taking value
    Pu, Guifang
    Xie, Yanxiang
    Wu, Lidong
    Wang, Kai
    FINANCE RESEARCH LETTERS, 2024, 70
  • [33] Regional carbon efficiency and corporate risk-taking
    Chen, Xiaohui
    Chen, Wen
    Wang, Xiaoxiang
    ECONOMIC CHANGE AND RESTRUCTURING, 2024, 57 (03)
  • [34] Risk-taking of bank CEOs and corporate innovation
    Bui, Dien Giau
    Chen, Yehning
    Lin, Chih-Yung
    Lin, Tse-Chun
    JOURNAL OF INTERNATIONAL MONEY AND FINANCE, 2021, 115
  • [35] The Economics of Managerial Taxes and Corporate Risk-Taking
    Armstrong, Christopher S.
    Glaeser, Stephen
    Huang, Sterling
    Taylor, Daniel J.
    ACCOUNTING REVIEW, 2019, 94 (01): : 1 - 24
  • [36] Insider trading restrictions and corporate risk-taking
    Kusnadi, Yuanto
    PACIFIC-BASIN FINANCE JOURNAL, 2015, 35 : 125 - 142
  • [37] The Effect of Stock Liquidity on Corporate Risk-Taking
    Hsu, Charles
    Ma, Zhiming
    Wu, Liansheng
    Zhou, Kaitang
    JOURNAL OF ACCOUNTING AUDITING AND FINANCE, 2020, 35 (04): : 748 - 776
  • [38] Local gender imbalance and corporate risk-taking
    Chen, Zhanhui
    Huang, Xiaoran
    Zhang, Lei
    JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION, 2022, 198 : 650 - 672
  • [39] CEOs With a Financial Background and Corporate Risk-Taking
    Wei, Dianlong
    Luo, Chunhua
    Lu, Jinjing
    JOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, 2025,
  • [40] Sarbanes-Oxley and corporate risk-taking
    Bargeron, Leonce L.
    Lehn, Kenneth M.
    Zutter, Chad J.
    JOURNAL OF ACCOUNTING & ECONOMICS, 2010, 49 (1-2): : 34 - 52