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Full-Text Articles in Business
Stock Liquidity And Default Risk Around The World, Sivathaasan Nadarajah, Huu Nhan Duong, Searat Ali, Benjamin Liu, Allen Huang
Stock Liquidity And Default Risk Around The World, Sivathaasan Nadarajah, Huu Nhan Duong, Searat Ali, Benjamin Liu, Allen Huang
Faculty of Business - Papers (Archive)
We document the negative effect of stock liquidity on default risk for a sample of 46 countries. We further find that default risk declines following the introduction of the Directive on Markets in Financial Instruments (MiFID)—an exogenous shock that increases liquidity. The effect of liquidity on default risk is more pronounced in countries with poorer investor protection and information environments. Further, this effect is attenuated (strengthened) for firms with greater information efficiency (governance monitoring). Overall, our findings highlight the important role of regulatory settings in shaping the impact of stock liquidity on default risk in international markets.
Effect Of Corporate Tax Avoidance Activities On Firm Bankruptcy Risk, Anirudh Dhawan, Liangbo Ma, Maria H. Kim
Effect Of Corporate Tax Avoidance Activities On Firm Bankruptcy Risk, Anirudh Dhawan, Liangbo Ma, Maria H. Kim
Faculty of Business - Papers (Archive)
Corporate tax avoidance has been shown to raise the cost of bank debt and lower credit and bond ratings. However, it is unclear whether tax avoidance actually increases a firm’s bankruptcy risk or whether it is just viewed negatively by banks and rating agencies. We find that firms engaging in tax avoidance and firms that are thinly capitalized face higher bankruptcy risk. To account for endogeneity and functional form misspecification, we verify our results using instrumental variable and propensity score matching methods. Our findings are consistent with the view that tax avoidance is a risk-enhancing activity.
Corporate Governance And The Insolvency Risk Of Financial Institutions, Searat Ali, Jamshed Iqbal
Corporate Governance And The Insolvency Risk Of Financial Institutions, Searat Ali, Jamshed Iqbal
Faculty of Business - Papers (Archive)
We investigate whether corporate governance is related to insolvency risk of financial institutions. Using a large sample of U.S. financial institutions over the 2005-2010 period, we find that corporate governance is positively related with insolvency risk of financial institutions as proxied by Merton's distance to default measure and credit default swap spread. We also find that "better" corporate governance increased insolvency risk relatively more for larger financial institutions and during the period of the global financial crisis. Our findings suggest that too-big-to fail and deposit insurance policies encourage excessive risk taking by financial institutions.
Social Risk In Female Entrepreneurship, Roshni Narendran
Social Risk In Female Entrepreneurship, Roshni Narendran
Faculty of Business - Papers (Archive)
The aim of this chapter is to introduce an alternate means of conceptualising risk, as well as, intercede the concept to the situation of Indian female entrepreneurs. In most contexts, risk tends to be associated with finance (Buttner & Rosen 1988; Jianonkoplos & Bernasek 1998; Verheul & Thurik 2001); however, other intricacies hindering the growth of female entrepreneurship need to be considered. This aspect is trivial when studies are conducted in a culturally rich country like India. When analysing the situation of women in India, researchers refer to the Manusmriti to highlight the social stigma against women in India. Manusmiriti …
Social Risk And Female Entrepreneurs In Kerala, India: A Preliminary Assessment, Roshni Narendran
Social Risk And Female Entrepreneurs In Kerala, India: A Preliminary Assessment, Roshni Narendran
Faculty of Business - Papers (Archive)
The aim of this paper is to highlight the concept of social risk in the literature of female entrepreneurship. In most studies, entrepreneurial risk is considered to be related to monetary concerns, but sociological risks are overlooked. The risks associated with social challenges will be discussed in this paper. First, a conceptual model is developed with the help of the literature review. This conceptual model is further explained with the help of a qualitative analysis that was carried out in the state of Kerala. This South Indian state is renowned for the high social status enjoyed by women; therefore, it …