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Corporate Governance in Global Shocks and Risk Management (Volume II)
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Corporate Governance in Global Shocks and Risk Management (Volume II)

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Business and Entrepreneurship".

Deadline for manuscript submissions: closed (20 July 2023) | Viewed by 22732

Special Issue Editor

Dr. Omar Al Farooque

E-Mail Website
Guest Editor
UNE Business School, University of New England, Armidale, NSW 2351, Australia
Interests: corporate governance; executive compensation; auditing; financial reporting/disclosure; earnings management; CSR; finance and banking research
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

The recurring nature of global financial and health crises has made greater challenges for corporate risk management, resulting from corruption and agency issues. Despite improvements in good governance, transparency, and accountability through regulations, reforms, disclosure, market mechanisms, etc., in the last few decades or so, sound financial and risk management remain at stake to maintain sustainable business operations due to global shocks and associated corruption and agency problems. This Special Issue focuses on the broad topic of “Corporate Governance in Global Shocks and Risk Management” and includes rigorous research on governance risk associated with global crises, pandemic, and agency and corruption risks. Both theoretical and empirical articles bringing together contemporary governance issues relating to financial and health crises, corruption, or agency-linked risk management and disclosure in stock exchange listed public companies are welcome. Manuscripts featuring original research that complements our understanding of new ideas, innovation, and challenges to mitigate governance risk in today’s complex world as well as contribution through rich data analysis are encouraged.

Dr. Omar Al Farooque
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • corporate governance
  • global shocks
  • agency and corruption risk
  • risk management
  • listed public companies

Published Papers (7 papers)

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Research

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25 pages, 1246 KiB  
Article
Stockholder Wealth Maximization during the Troubled Asset Relief Program Period: Is Executive Pay Harmful?
by Eddy Junarsin, Rizky Yusviento Pelawi, Jeffrey Bastanta Pelawi and Jordan Kristanto
J. Risk Financial Manag. 2024, 17(1), 33; https://doi.org/10.3390/jrfm17010033 - 15 Jan 2024
Viewed by 1188
Abstract
This study investigates governance mechanisms and their relation to firm value, i.e., executive compensation restrictions during the regulatory period and their effects on the performance of firms that received Troubled Asset Relief Program (TARP) funds. We employ an event study to investigate the [...] Read more.
This study investigates governance mechanisms and their relation to firm value, i.e., executive compensation restrictions during the regulatory period and their effects on the performance of firms that received Troubled Asset Relief Program (TARP) funds. We employ an event study to investigate the market reactions for TARP recipients, followed by OLS regression to examine the stock return effects of 10 announcements. For comparison, we also employ a multivariate regression model (MVRM) based on a system of equations with seemingly unrelated regressions (SURs). Our evidence shows that changes in firm value have a negative and significant relationship with changes in total compensation for TARP companies that have paid back their debts to the government. However, the relationship is weaker than that for TARP companies that have not paid back the bailout money. Full article
(This article belongs to the Special Issue Corporate Governance in Global Shocks and Risk Management (Volume II))
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14 pages, 313 KiB  
Article
Organization Capital and Corporate Governance
by Jaeseong Lim
J. Risk Financial Manag. 2023, 16(9), 384; https://doi.org/10.3390/jrfm16090384 - 28 Aug 2023
Viewed by 1018
Abstract
Management with high organization capital, which can be seen as an indicator of superior internal governance, can be expected to exhibit a preference for cash reserves to safeguard assets and mitigate the risk of underinvestment. However, external parties may see high cash reserves [...] Read more.
Management with high organization capital, which can be seen as an indicator of superior internal governance, can be expected to exhibit a preference for cash reserves to safeguard assets and mitigate the risk of underinvestment. However, external parties may see high cash reserves as a risk factor for the agency problem. Strong external governance can mitigate the preference of management with high organization capital for cash reserves. The empirical analyses show a positive association between the organization capital of U.S.-listed firms and their cash reserves when controlling for multiple variables. Furthermore, through employing the hostile takeover threat index, I reveal the disciplinary effects of strong external governance. This study adds to the existing literature investigating corporate governance that is useful in corporate decision making. Full article
(This article belongs to the Special Issue Corporate Governance in Global Shocks and Risk Management (Volume II))
17 pages, 503 KiB  
Article
The Effect of the COVID-19 Pandemic on Corporate Dividend Policy of Moroccan Listed Firms
by Zouhair Boumlik, Badia Oulhadj and Olivier Colot
J. Risk Financial Manag. 2023, 16(8), 350; https://doi.org/10.3390/jrfm16080350 - 26 Jul 2023
Cited by 1 | Viewed by 2107
Abstract
The recent literature provides conflicting findings and remains inconclusive regarding the impact of the COVID-19 crisis on firms’ dividend policies. In this paper, we examine the dividend policy of Moroccan firms listed in the Casablanca Stock Exchange during the COVID-19 shock. Using panel [...] Read more.
The recent literature provides conflicting findings and remains inconclusive regarding the impact of the COVID-19 crisis on firms’ dividend policies. In this paper, we examine the dividend policy of Moroccan firms listed in the Casablanca Stock Exchange during the COVID-19 shock. Using panel data from 2015 to 2021 of non-financial listed firms, we observe that the proportion of dividend cuts during the last seven years (2015–2021) achieved its highest level on the onset of the crisis. Furthermore, results of the ordinary least square (OLS) regressions demonstrate that the COVID-19 shock has negatively affected the dividend payout of Moroccan listed firms. This study implies that, in times of economic crisis, Moroccan firms exhibit risk-averse behavior by prioritizing the retention of earnings over distributing dividends, scarifying, therefore, the transmission of positive signals to investors and external stakeholders. Furthermore, our results reveal that profitability, growth opportunities, leverage, and size are relevant determinants of corporate dividend policy. Full article
(This article belongs to the Special Issue Corporate Governance in Global Shocks and Risk Management (Volume II))
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43 pages, 749 KiB  
Article
The Moderating Effect of the COVID-19 Pandemic on the Relation between Corporate Governance and Firm Performance
by Hossein Tarighi, Zeynab Nourbakhsh Hosseiny, Maryam Akbari and Elaheh Mohammadhosseini
J. Risk Financial Manag. 2023, 16(7), 306; https://doi.org/10.3390/jrfm16070306 - 23 Jun 2023
Cited by 5 | Viewed by 3108
Abstract
The present study aims to investigate the association between corporate governance mechanisms and financial performance among companies listed on the Tehran Stock Exchange (TSE). We also want to know if the COVID-19 global crisis moderates the relationship between them. The study sample consists [...] Read more.
The present study aims to investigate the association between corporate governance mechanisms and financial performance among companies listed on the Tehran Stock Exchange (TSE). We also want to know if the COVID-19 global crisis moderates the relationship between them. The study sample consists of 1098 observations and 183 companies listed on the TSE from 2016 to 2021; furthermore, the statistical method used to test the hypotheses is panel data with random effects. In line with our expectations, the results show that the coronavirus pandemic worsened Iranian corporate performance. In support of agency theory, we figure out that board independence, board meeting frequency, and board financial expertise are correlated positively with firm value. In favor of resource dependency theory, this study finds robust evidence that audit committee size and independence have a positive effect on corporate performance. Most importantly, the positive linkage between board independence, board financial expertise, size, and independence of audit committee with firm performance was reversed during the COVID-19 pandemic, although the positive role of board meeting frequency in corporate profitability remained stable even during the COVID-19 outbreak. Furthermore, the outcomes indicate that CEO duality affects firms negatively, and this devastating effect became even stronger with the COVID-19 pandemic. Finally, we find that firms involved in mergers and acquisitions (M&A) managed to increase shareholders’ wealth using competitive advantage even during the pandemic. Full article
(This article belongs to the Special Issue Corporate Governance in Global Shocks and Risk Management (Volume II))
17 pages, 343 KiB  
Article
A Data Valuation Model to Estimate the Investment Value of Platform Companies: Based on Discounted Cash Flow
by Hyongmook Cheong, Boyoung Kim and Ivan Ureta Vaquero
J. Risk Financial Manag. 2023, 16(6), 293; https://doi.org/10.3390/jrfm16060293 - 07 Jun 2023
Viewed by 2866
Abstract
As both investment attraction and mergers and acquisitions targeting information technology and platform companies are becoming more important in the digital-centric economic environment, interest in valuing corporate data assets is increasing. Accordingly, among the income approaches used in business valuation, this study presents [...] Read more.
As both investment attraction and mergers and acquisitions targeting information technology and platform companies are becoming more important in the digital-centric economic environment, interest in valuing corporate data assets is increasing. Accordingly, among the income approaches used in business valuation, this study presents a data valuation model based on discounted cash flow. This model is expected to be useful for corporate investment decision-making. The assumptions used in this study for the estimation of data income include intangible asset value, exclude net asset value, and data attribution is centered on technology, human resources, and market factors. In particular, data attribution accounts comprise ordinary data research and development, data labor costs, and data advertising expenses. Data costs were divided into those incurred during collection, storage, curation, analysis, and utilization. Financial statements and related data from a real estate information platform operator over three years were collected and used to simulate the data valuation model. The simulation reveals that the operator possesses KRW 472.6 billion in data assets. Ultimately, the data valuation model developed in this study can contribute to strengthening platform operators’ investment attraction, guaranteeing financial sustainability, and transparency and data assetization. Full article
(This article belongs to the Special Issue Corporate Governance in Global Shocks and Risk Management (Volume II))
12 pages, 500 KiB  
Article
Corporate Social Responsibility Funding and Its Impact on India’s Sustainable Development: Using the Poverty Score as a Moderator
by Rahul Singh Gautam, Venkata Mrudula Bhimavarapu, Shailesh Rastogi, Jyoti Mehndiratta Kappal, Hitesh Patole and Aman Pushp
J. Risk Financial Manag. 2023, 16(2), 90; https://doi.org/10.3390/jrfm16020090 - 03 Feb 2023
Cited by 4 | Viewed by 4870
Abstract
This study investigates the impact of corporate social responsibility (CSR) funding in the education sector and the environment and how it affects India’s sustainable development. This study was conducted using secondary data and the data were collected from 28 Indian states and three [...] Read more.
This study investigates the impact of corporate social responsibility (CSR) funding in the education sector and the environment and how it affects India’s sustainable development. This study was conducted using secondary data and the data were collected from 28 Indian states and three union territories for the four fiscal years 2018 to 2021. This study examines the hypothesis using the generalized method of moments (GMM). As a result, it is found that overall CSR funding positively contributes to India’s sustainable development. Additionally, this study finds that CSR funding in education and the environment supports India’s sustainable development. It is also observed that, under the interaction effect of poverty (poverty score), CSR funding (total) and CSR funding on education positively affect sustainable growth. However, CSR funding for environmental activities does not significantly influence India’s FD under the moderation of poverty score. These factors are essential for India’s sustainable development and poverty reduction. Investing CSR funds in rural development, education, the environment, health, and other areas supporting India’s sustainable development leads to impressive economic growth and reduces poverty. Hence, it is attributed that CSR funding plays a vital role in India’s sustainable development. Future research can be carried out on CSR policies and funding using different variables and periods. Full article
(This article belongs to the Special Issue Corporate Governance in Global Shocks and Risk Management (Volume II))
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Review

Jump to: Research

17 pages, 799 KiB  
Review
Corporate Investment Decision: A Review of Literature
by Umar Farooq, Mosab I. Tabash, Ahmad A. Al-Naimi and Krzysztof Drachal
J. Risk Financial Manag. 2022, 15(12), 611; https://doi.org/10.3390/jrfm15120611 - 16 Dec 2022
Cited by 3 | Viewed by 7009
Abstract
This study is an attempt to review relevant literature on the theme of corporate real investment decisions. We have conducted a comprehensive survey of literature on the studies published in well-reputed journals of finance, i.e., The Journal of Finance, The Review of Financial [...] Read more.
This study is an attempt to review relevant literature on the theme of corporate real investment decisions. We have conducted a comprehensive survey of literature on the studies published in well-reputed journals of finance, i.e., The Journal of Finance, The Review of Financial Studies, and The Journal of Financial Economics, during the years 2010 to 2022. The theoretical analysis reveals that information asymmetry, cash holdings, policy uncertainty, idiosyncratic risk, governance quality, financing diversification, financial development, managerial network, investor protection, tax policy, etc., are prominent factors influencing investment decisions. The current review analysis is useful and has certain policy implications for investment managers regarding investment decisions. It guides on the factors that can impede or boost investment volume. Our study has a novel contribution to the literature by summarizing the voluminous empirical literature arranged on physical investment decisions. Full article
(This article belongs to the Special Issue Corporate Governance in Global Shocks and Risk Management (Volume II))
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