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Article
Publication date: 9 September 2021

Elisa Menicucci and Guido Paolucci

The purpose of this paper is to investigate the relationship between gender diversity and the risk profile of Italian banks during the period 2015–2019. This study…

Abstract

Purpose

The purpose of this paper is to investigate the relationship between gender diversity and the risk profile of Italian banks during the period 2015–2019. This study examines whether the presence of female board directors or top executives has any significant effect on bank risk-taking.

Design/methodology/approach

To explore the influence of women on bank risk-taking, the authors analyzed a sample of 387 Italian banks and developed an econometric model applying unbalanced panel data with firm fixed effects and controls per year. Within a multivariate regression model, the authors considered five risk dimensions to verify the effect of gender diversity.

Findings

The findings suggest that female board directors and executives are considerably more risk averse and less overconfident than their male colleagues, thus confirming a negative causality between risk-taking and gender diversity. The results reveal that banks headed by women are less risky because they report higher capital adequacy and equity to assets ratios. As credit risk in female-led banks is no different from male-led ones, higher capital adequacy does not derive from lower asset quality because it is linked to the higher risk aversion of female directors and top managers.

Research limitations/implications

From a theoretical standpoint, the results suggest that having women in executive positions entails different risk implications for Italian banks; from a managerial perspective, the results highlight conditions that may promote the role of women in the banking sector. The conclusions are of particular significance because they provide some support for the view that regulators should favor gender quotas in the board management of banks to reduce risk-taking behavior.

Originality/value

This paper offers an in-depth examination of the risk practices of banks and it attempts to bridge the gap in prior literature on the risk profile of the Italian banking industry given that few empirical studies have examined the determinants of risk-taking in this field, to date. The findings on the higher risk aversion of women directors advance the understanding of the determinants of risk-taking behavior in banks, suggesting that gender quotas in bank boards can contribute to reducing risk-taking behavior. This also unveils some policy implications for bank regulatory authorities.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 22 July 2021

Syed Awais Ahmad Tipu and Kamel Fantazy

The current study provides new insights into the relationships between knowledge development (KD) and sustainable supply chain performance (SSCP) by exploring the…

Abstract

Purpose

The current study provides new insights into the relationships between knowledge development (KD) and sustainable supply chain performance (SSCP) by exploring the mediating effects of entrepreneurial orientation (EO) in terms of innovativeness, proactiveness and risk taking.

Design/methodology/approach

Data were collected by questionnaire survey from 242 manufacturing organizations. Structural equation modeling (SEM) was used to test the hypotheses.

Findings

The results reveal that innovativeness and proactiveness have full mediating effects on the relationship between KD and SSCP. Though KD is negatively related to risk taking and has insignificant indirect effect on SSCP via risk taking, the mediating effect of risk taking remains moderate positive on the relationship between KD and SSCP.

Research limitations/implications

Given that the current study focuses on manufacturing sector, future research is needed for more comparative studies conducted in different sectors and cultural contexts. The negative link between KD and risk taking also warrants future investigation.

Practical implications

Organizations may reduce their level of risk taking due to the increase in KD. However, in order to enhance SSCP, risk taking is still needed as it mediates the relationship between KD and SSCP.

Originality/value

The mediating effects of innovativeness, proactiveness and risk taking on the relationship between KD and SSCP are unknown. Current study aims to address this gap.

Details

International Journal of Productivity and Performance Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 1 July 2021

Hanis Hazwani Ahmad and Adilah Azhari

This study explores the effects of the performance and corporate risk-taking behaviour of agricultural firms. Despite its importance in mitigating climate change, the…

Abstract

Purpose

This study explores the effects of the performance and corporate risk-taking behaviour of agricultural firms. Despite its importance in mitigating climate change, the agricultural sector also faces global competition, market liberalisation, rapid technological advances and the starter of stricter quality and safety procedures, all of which require firms to take greater risks.

Design/methodology/approach

This study explores this relationship by applying generalised least square (GLS), random effect methodologies (REM) and generalised method of moments (GMM).

Findings

The findings report a favourable relationship between firm performance and corporate risk-taking using a sample of firms from an emerging market.

Research limitations/implications

The effects of these results for management practice and recommendations for further research were examined.

Originality/value

While this empirical study used a sample focused on a single industry, most previous studies focused on multiple industries. The originality of this study is its analysis of how firm performance affects corporate risk-taking in the Malaysian agriculture sector.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-0839

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Article
Publication date: 13 July 2021

Tamanna Dalwai, Dharmendra Singh and Ananda S.

The purpose of this paper is to investigate the impact of intellectual capital (IC) efficiency on the banks’ risk-taking and stability of Asian emerging markets.

Abstract

Purpose

The purpose of this paper is to investigate the impact of intellectual capital (IC) efficiency on the banks’ risk-taking and stability of Asian emerging markets.

Design/methodology/approach

This study uses a sample of 204 listed banks from 12 Asian emerging countries for the period 2010 to 2019. Data were analyzed using Ordinary Least Squares regression and checked for robustness using system generalized methods moment (GMM) estimation. The dependent variable of bank stability is measured using Z-score-based return on assets (ROA) and return on equity (ROE). The second dependent variable of bank risk is proxied by the standard deviation of ROA, ROE, non-performing loans and loan loss provision.

Findings

The results suggest the IC efficiency has no association with bank risk-taking and stability. The findings lend no support to the resource-based theory. The robustness of this result is confirmed by the system GMM estimation. However, support is found for the competition fragility view as high market power is associated with low risk-taking. The IC subcomponents, human capital efficiency (HCE) report a negative coefficient for bank risk-taking thereby having no support for the hypothesized relationships. Diversified banks with a higher deposit to total asset ratio resort to high risk-taking.

Research limitations/implications

IC efficiency does not have an impact on the bank’s risk-taking behavior and stability for Asian banks. Managers can use these findings to improve their IC and boost investor confidence. Regulatory authorities should increase its monitoring function of banks when the GDP decreases as risk-taking behavior are galvanized during this period.

Originality/value

This research is one of the first to provide empirical evidence of IC efficiency’s relationship with bank stability and bank risk-taking. The implications are useful for policymakers, managers and governing bodies to enhance the banks’ IC efficiency.

Details

Competitiveness Review: An International Business Journal , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1059-5422

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Book part
Publication date: 8 July 2010

Esra Memili, Kimberly A. Eddleston, Thomas M. Zellweger, Franz W. Kellermanns and Tim Barnett

Drawing on organizational identity theory, we develop a model linking family ownership and expectations, entrepreneurial risk taking, and image in family firms to explain…

Abstract

Drawing on organizational identity theory, we develop a model linking family ownership and expectations, entrepreneurial risk taking, and image in family firms to explain family firm growth. Testing our model on a sample of 163 Swiss family firms, we suggest that entrepreneurial risk taking and image can both lead to growth in family firms. We further find that family expectations have an influence on both entrepreneurial risk taking and family firm image. This finding suggests that family firms may benefit from two growth paths – forward looking risk taking and the image of the family firm that builds on the past, and that these paths are nurtured by family expectations.

Details

Entrepreneurship and Family Business
Type: Book
ISBN: 978-0-85724-097-2

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Article
Publication date: 29 April 2021

Eda Gurel, Melih Madanoglu and Levent Altinay

This longitudinal study assesses whether higher education has the same impact on the entrepreneurial intentions of women and men with regard to their propensity to risk

Abstract

Purpose

This longitudinal study assesses whether higher education has the same impact on the entrepreneurial intentions of women and men with regard to their propensity to risk-taking in particular.

Design/methodology/approach

A self-administrated survey instrument was used to collect data from students studying business and engineering at five selected universities in Turkey. The survey was carried out in two intervals: first year and fourth year of studies. A total of 215 student participated in both waves.

Findings

The findings indicate that the impact of education is stronger for women than for men as the relationship between gender and entrepreneurial intention is moderated by education and risk-taking propensity in that the entrepreneurial intention of women with high or low risk-taking propensity increases when they acquire higher education. In particular, the boost is more noticeable for women with low risk-taking propensity. On the contrary, the effect of education is negative for men with both high risk-taking propensity and low risk-taking propensity.

Practical implications

This study has identified that the impact of education is different for women and men. Based on these findings, Turkey could offer gender-specific entrepreneurship education in higher education for individuals who could then exploit their entrepreneurial capacity and thus contribute to the social and economic well-being of the country.

Originality/value

This paper makes two distinct contributions. First, this is one of the few longitudinal studies in the literature which demonstrates the differences between females and males in terms of their entrepreneurial intention and shows how risk-taking and education influence entrepreneurial intention. Second, it offers new insights into entrepreneurship research from a developing-country but emerging-economy context.

Details

Education + Training, vol. 63 no. 5
Type: Research Article
ISSN: 0040-0912

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Book part
Publication date: 4 December 2012

Zangina Isshaq, Godfred A. Bokpin and Benjamin Amoah

Purpose – This paper examines the interaction of efficiency and bank risk taking in the Ghanaian banking industry.Design/methodology/approach – We relate risk taking to…

Abstract

Purpose – This paper examines the interaction of efficiency and bank risk taking in the Ghanaian banking industry.

Design/methodology/approach – We relate risk taking to price competitiveness, foreign ownership and cost efficiency and other control variables. Cost-inefficiency scores from a stochastic frontier model are used, and a Lerner price index is employed to proxy for market power.

Findings – Our results suggest that market power affects risk taking when conditioned on foreign ownership, but foreign bank risk-taking behaviour is not statistically different from local banks. Cost inefficiency diminishes bank soundness. We also find that industry concentration discourages greater risk taking.

Originality/value – Our study extends the views on risk taking and competition among banks in Ghana, which throws more light from an emerging economy perspective.

Details

Finance and Development in Africa
Type: Book
ISBN: 978-1-78190-225-7

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Article
Publication date: 29 April 2021

Mahdi Salehi, Arash Arianpoor and Nader Naghshbandi

The main objective of the paper is to examine the relationship between managerial attributes (e.g. managerial entrenchment, managerial myopia and managerial…

Abstract

Purpose

The main objective of the paper is to examine the relationship between managerial attributes (e.g. managerial entrenchment, managerial myopia and managerial overconfidence) and firm risk-taking on the Tehran Stock Exchange (TSE).

Design/methodology/approach

The study’s sample comprises 150 companies listed on the TSE from 2011 to 2017. Risk-taking is calculated as the standard deviation (SD) of stock return. Explanatory factor analysis was performed to calculate the weight of each of the five variables managerial ownership, board independence, chief executive officer (CEO) tenure, board compensation and CEO duality as a proxy for managerial entrenchment. The study by Anderson and Hsiao (1982) was also used to calculate managerial myopia, and the study by Schrand and Zechman (2012) was used to calculate managerial overconfidence.

Findings

The results indicate that the effect of managerial entrenchment and managerial myopia on risk-taking of listed firms on the TSE is positive and significant, implying that an increase in CEO entrenchment is likely to give rise to risk-taking. The authors conjecture that this finding could be due to the investment projects impairing the firm performance in the long run. Furthermore, the effect of managerial overconfidence on listed firms' risk-taking on the TSE is significantly negative. Since overconfidence is one of the traits of narcissism and corporate managers tend to be encouraged and admired, it is implied that they tend to make efficient and low-risk investments that ultimately reduce the firm risk-taking.

Originality/value

Several theoretical studies show that managerial behavior is a determining factor in the economy. One of the reasons which justify the originality of this study is the context and institutional environment. Undoubtedly, managerial behavior (e.g. managerial entrenchment, managerial myopia and managerial overconfidence) is expected to have some significant variations in developing countries compared to prevailing in developed countries, particularly in the Iranian stock market the economic sanctions. Furthermore, due to the direct impact of individuals' psychological and behavioral characteristics on their decisions and the effect of companies' risk-taking on increasing and decreasing shareholders and companies' wealth, this research is essential. Given the function of designed behavioral criteria for assessing risk-taking behaviors, the relationship between managerial attributes and firms' risk-taking is still unclear and investigated in this study.

Details

The TQM Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-2731

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Book part
Publication date: 13 July 2016

Susan R. Fisk

The goal of this chapter is to both provide a sociological explanation for gender differences in risk-taking behavior and to explain how such gender differences in…

Abstract

Purpose

The goal of this chapter is to both provide a sociological explanation for gender differences in risk-taking behavior and to explain how such gender differences in behavior may contribute to women’s underrepresentation at the top of hierarchies.

Methodology/approach

I synthesize relevant research findings from the fields of social psychology, economics, psychology, decisions science, and sociology.

Originality/value

I argue that risk-taking is a gendered action due to both prescriptive and descriptive gender stereotypes. The fact that risk-taking is a gendered action offers sociological insights as to why women take fewer risks than men. First, women may rationally choose to take fewer risks, given that risk-taking is less rewarding for them. Second, the aforementioned gender stereotypes may cause institutional gatekeepers to give women fewer opportunities to take risks.

Sociologists should care about this phenomenon because large rewards are attached to successful risk-taking behavior. Thus, if men as a group take more successful risks than women as a group – simply because they take more risks, and thus by chance experience more successful risks – then more men than women will experience upward mobility caused by risk-taking.

Social implications

Gender differences in risk-taking behavior likely depress the upward mobility of women and are a contributing factor to the dearth of women in top positions. In this era of falling formal barriers and women’s educational gains, gender differences in risk-taking behavior are likely of increasing importance for understanding the inequalities in hierarchies in U.S. society.

Details

Advances in Group Processes
Type: Book
ISBN: 978-1-78635-041-1

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Article
Publication date: 15 December 2020

Quoc Trung Tran

This paper investigates the relationship between corruption and corporate risk-taking in emerging markets where corruption is considered as “public enemy number one.”

Abstract

Purpose

This paper investigates the relationship between corruption and corporate risk-taking in emerging markets where corruption is considered as “public enemy number one.”

Design/methodology/approach

The study measures corruption based on Corruption Control Index annually published by World Bank and examines how corruption affects corporate risk-taking in emerging markets covered in MSCI Emerging Market Index.

Findings

With a sample of 75,338 observations from 8,326 firms across 20 emerging stock markets during the period 2005–2016, the author finds that corruption negatively affects corporate risk-taking. Robustness checks with a reduced sample without China and India, alternatives of corruption measures, various measures of risk-taking and Generalized method of moments (GMM) estimator also show consistent results. Moreover, additional analysis shows that information disclosure mitigates the effect of corruption on risk-taking.

Originality/value

The extant literature implies that corruption may decrease corporate risk-taking behavior through two channels including operational cost and debt financing cost.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

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