The effects of ownership concentration and corporate governance on corporate risk-taking: The case of Thailand
ISSN: 1030-9616
Article publication date: 18 December 2019
Issue publication date: 24 January 2020
Abstract
Purpose
This study aims to investigate the effects of ownership concentration and corporate governance on the extent of risk-taking in an important emerging economy – Thailand.
Design/methodology/approach
The results are corroborated by additional analysis, including an instrumental-variable analysis and propensity score matching.
Findings
Large owners are under-diversified and are thus more vulnerable to the firm’s idiosyncratic risk. Therefore, they tend to advocate less risky corporate policies and strategies. Consistent with this notion, the authors find that more concentrated ownership induces firms to take significantly less risk.
Originality/value
Ownership in Thai firms is substantially more concentrated than that in developed economies, providing a unique opportunity to study the effect of highly concentrated ownership on risk-taking.
Keywords
Citation
Jumreornvong, S., Treepongkaruna, S., Prommin, P. and Jiraporn, P. (2018), "The effects of ownership concentration and corporate governance on corporate risk-taking: The case of Thailand", Accounting Research Journal, Vol. 33 No. 1, pp. 252-267. https://doi.org/10.1108/ARJ-09-2018-0144
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited