Pyramidal structure, risk‐taking and firm value

Su, Kun; Wan, Rui; Song, Victor

doi:10.1111/ecot.12156

Cited by 7 publications

(3 citation statements)

References 47 publications

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“…Among academic investigations of antecedents to risk‐taking, the impact of corporate governance structure as it relates to risk taking has become a topic of growing interest (Su & Liu, ). Arguments supporting the role of corporate governance structure include classical theories such as the principle‐agent perspective (Chen & Zheng, ), stakeholder theory (Cziraki & Xu, ), and principle‐principle viewpoint (Boubakri, Cosset, & Saffar, ; Su et al, ; Su, Wan, & Song, ). However, relatively few studies have focused directly on corporate boards although they are the key corporate governance mechanisms affecting risk taking choices.…”

Section: Introductionmentioning

confidence: 99%

Board size, social trust, and corporate risk taking: Evidence from China

Liu

Zhang

2019

Manage Decis Econ

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This paper examines the relationship between board size and corporate risk taking, as well as the moderating effects of regional‐level social trust. Results show that larger boards have greater difficulty in achieving consensus on extreme decisions and thus tend to reduce firm risk taking in a Chinese context. Moreover, social trust had a significant moderating effect on the relationship between board size and corporate risk taking. This study contributes to the risk taking literature by testing the board size‐risk taking linkage in a Chinese context and offering an explanation based on internal board governance and external informal institution heterogeneity.

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Section: Introductionmentioning

confidence: 99%

Board size, social trust, and corporate risk taking: Evidence from China

Liu

Zhang

2019

Manage Decis Econ

Self Cite

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“…The level of risk-taking reflects the ability of enterprises to grasp financing opportunities [78]. Moreover, higher risk-taking is conducive for enterprises to grasp investment opportunities with higher returns [29,59] to achieve a long-term competitive advantage.…”

Section: Further Analysismentioning

confidence: 99%

Does Corporate Social Responsibility Impact on Corporate Risk-Taking? Evidence from Emerging Economy

Liu

Fu³

et al. 2022

Sustainability

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This study analyzes the impact of corporate social responsibility (CSR) fulfillment on corporate risk-taking to assist stakeholders in identifying the “double-edged sword” role of CSR activities and provide empirical evidence for enterprises to properly carry out CSR activities. The results show that the self-interest instrumentalization of CSR activities intensifies agency conflict, and CSR fulfillment weakens risk-taking to a certain extent. When CSR fulfillment reaches a certain value, CSR activities can improve risk-taking. Then, CSR fulfillment and risk-taking show a U-shaped relationship. Further analysis shows that the impacts of CSR on debt financing and R&D input reflect the U-shaped effect pathways of CSR fulfillment on risk-taking. Finally, it is suggested that CSR activities should be avoided to become the “self-interest tool” of the management. The regulators guide enterprises to break through the inflection point of the U-shaped effect and consider more for the stakeholders’ overall interests. Additionally, the regulators establish an effective compensation system to ensure that the enterprises with adequate CSR fulfillment obtain high-quality capital resources and promote the sustainable development of the capital market.

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“…As this study draws on group decision‐making theory, it is pertinent to consider the role of firm risk taking (Nakano & Nguyen, ; Su et al, ). Prior research has shown that risk taking has a positive impact on firm value (Su, Wan, & Song, ). Risk taking has also been shown to affect the efficiency of the firm's capital allocation (Durnev, Morck, & Yeung, ), growth (Campbell, Lettau, Malkiel, & Xu, ; Kim, ), and technological innovation (García‐Granero, Llopis, Fernández‐Mesa, & Alegre, ).…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 99%

Board size and acquisition outcome: The moderating role of home country formal institutional development

Waqar

2020

Manage Decis Econ

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The effect of acquirer's board size on the outcome of an acquisition (i.e., whether an announced deal gets abandoned or completed) was examined on the basis of a sample of 775 cross-border acquisitions. The study took into consideration the moderating effect of formal institutional development of the home country. Results showed that board size was negatively associated with the likelihood of deal abandonment and that this relationship was weaker for home countries where formal institutional development was high. The study contributes to the literature on group decision-making theory, institutional view of corporate governance, and acquisition outcome.

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Pyramidal structure, risk‐taking and firm value

Cited by 7 publications

References 47 publications

Board size, social trust, and corporate risk taking: Evidence from China

Board size, social trust, and corporate risk taking: Evidence from China

Does Corporate Social Responsibility Impact on Corporate Risk-Taking? Evidence from Emerging Economy

Board size and acquisition outcome: The moderating role of home country formal institutional development

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