TY  - JOUR
AB  - Purpose The purpose of this paper was first to find out whether the negative relationship between board size and future firm risk persists in China while contemplating all sorts of endogeneity. Second, the authors have investigated the role of large shareholders in influencing the managerial decisions concerning future firm risk via board size. Finally, the authors examined whether the moderating role of large shareholders is any different in state-owned enterprises (SOEs) and non-state-owned enterprises (NSOEs) in China.Design/methodology/approach The sample included all the A-listed firms listed on the Shanghai and the Shenzhen stock exchanges over a sample period from 2008 to 2013. The authors used fixed effects regression and the generalized method of moments (GMM) to test the three hypotheses.Findings The authors found that board size is negatively associated with future firm risk when measured as volatility in future stock prices and future cash flows. Second, large shareholders directly influence managerial decisions about future firm risk, irrespective of board size. Third, the moderating role of ownership concentration is insignificant in both SOEs and NSOEs.Originality/value To the best of the authors’ knowledge, this is the first study which has analyzed the role of large shareholders in the relationship between board size and future firm risk. This study provides valuable insights, particularly in the context of a developing country, into the role played by large shareholders in influencing managerial decisions concerning future firm risk.
VL  - 10
IS  - 4
SN  - 1750-614X
DO  - 10.1108/CMS-05-2016-0094
UR  - https://doi.org/10.1108/CMS-05-2016-0094
AU  - Haider Junaid
AU  - Fang Hong-Xing
PY  - 2016
Y1  - 2016/01/01
TI  - Board size, ownership concentration and future firm risk
T2  - Chinese Management Studies
PB  - Emerald Group Publishing Limited
SP  - 692
EP  - 709
Y2  - 2024/05/07
ER  -