Corporate governance, earnings quality and idiosyncratic crash risk during the 2007–2008 financial crisis

Silva, Paulo Pereira da

doi:10.1016/j.mulfin.2019.07.002

Cited by 15 publications

(13 citation statements)

References 44 publications

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“…Francis et al (2016) find that earnings management significantly increases the risk of stock price collapse as it is a common means for insiders to maximize their self-interests. Using 2008 financial crisis as an exogenous shock to the overall trust in the capital market, Da Silva (2019) documents that precrisis earnings quality is an important determinant of abnormal crash risk.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Earnings quality and crash risk in China: an integrated analysis

Wongchoti

Hao

et al. 2020

JABES

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PurposeThe authors provide a comprehensive empirical examination on the impact of earnings quality on stock price crash risk in China.Design/methodology/approachThe authors acknowledge and distinguish two-dimensional proxies for earnings quality – accounting-based (earnings management degree) and market-based (earnings transparency) known in accounting and finance literature.FindingsThe authors find that both generally indicate that better earnings quality is associated with less crashes. However, extremely high earnings transparency interacted with insider trading profit can also actually exacerbate stock price crashes.Originality/valueThis study is the first to highlight the pertinence of accounting-based measures to proxy for earnings quality in a fast-growing emerging market environment such as China.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Earnings quality and crash risk in China: an integrated analysis

Wongchoti

Hao

et al. 2020

JABES

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“…Moreover, there is much debate on the assessment of the macro-economic environment, but the impact of the sectoral environment on systemic risk is yet to be explored. In a recent study, Da Silva (2019) also highlights that the relationship between systemic risk and its determinants is affected by a change in economic conditions, and the effect of independent variables might increase during a crisis. Similar arguments are supported by contemporary literature (Claessens et al ., 2000; Da Silva, 2019; Kleinow et al ., 2017; Lee et al.…”

Section: Introduction Of the Studymentioning

confidence: 99%

“…In a recent study, Da Silva (2019) also highlights that the relationship between systemic risk and its determinants is affected by a change in economic conditions, and the effect of independent variables might increase during a crisis. Similar arguments are supported by contemporary literature (Claessens et al ., 2000; Da Silva, 2019; Kleinow et al ., 2017; Lee et al. , 2020; Buch et al ., 2019).…”

Section: Introduction Of the Studymentioning

confidence: 99%

Dynamic modeling of marginal expected shortfall under economic sensitivity: empirical evidence from Pakistan

Hanif¹

2023

SAJBS

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PurposeSystemic risk is of concern for economic welfare as it can lower the credit supply to all the sectors within an economy. This study examines for the first time the complete hierarchy of variables that drive systemic risk during normal and crisis periods in Pakistan, a developing economy.Design/methodology/approachSecondary data of the bank, sector and country variables are used for the purpose of the analysis spanning from 2000 to 2020. Systemic risk is computed using marginal expected shortfall (MES). One-step and two-step system GMM is performed to estimate the impact of firm, sector and country-level variables on systemic risk.FindingsThe findings of the study highlight that sector-level variables are also highly significant in explaining the systemic risk dynamics along with bank and country-level variables. In addition, economic sensitivity influences the significance level of variables across crisis and post-crisis periods and modifies the direction of relationships in some instances.Research limitations/implicationsThe study examines the systemic risk of a developing economy, and findings may not be generalizable to developed economies.Practical implicationsThe outcome of the study provides a comprehensive framework for the central bank and other regulatory authorities that can be translated into timely policies to avoid systemic financial crisis.Social implicationsThe negative externalities generated by systemic risk also affect the general public. The study results can be used to avoid the systemic financial crisis and resultantly save the loss of the general public's hard-earned holdings.Originality/valueThe firm, sector and country-level variables are modeled for the first time to estimate systemic risk across different economic conditions in a developing economy, Pakistan. The study can also act as a reference for researchers in developed economies as well regarding the role of sector-level variables in explaining systemic risk.

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“…Posterior a la crisis financiera global de 2008 comenzaron a cuestionarse las conveniencias de la implementación de las prácticas de GC [GC]. Diferentes estudios, encontraron que las deficiencias en los gobiernos corporativos tienen una gran relación con los momentos de crisis (da Silva, 2019;Instituto Iberoamericano de Valores, 2015). Otros autores argumentan que la poca vigilancia por parte de los accionistas es la principal causa de estos sucesos.…”

Section: Introductionunclassified

Gobierno corporativo en la banca internacional: Un estudio para Iberoamérica

Vargas¹,

B.²,

González-Campo³

2022

RVG

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Este artículo se propone caracterizar los gobiernos corporativos (GC) de la banca iberoamericana, desde su conformación y su relación con los stakeholders. Esta investigación fue realizada mediante un análisis de contenido de reportes anuales y páginas web de 39 bancos de Iberoamérica que son reconocidos como los mejores bancos de cada País, a través de organismos especializados y hacen parte de importantes clasificaciones en Iberoamérica. Los resultados muestran la importancia que tienen los clientes y los colaboradores como actores del GC, así como otros componentes de la sociedad como el desarrollo social y económico. Se concluye que es posible evidenciar el compromiso que tienen los bancos por seguir los lineamientos de GC y proyectarlos a las decisiones donde se ven involucrados sus diferentes grupos de interés.

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Corporate governance, earnings quality and idiosyncratic crash risk during the 2007–2008 financial crisis

Cited by 15 publications

References 44 publications

Earnings quality and crash risk in China: an integrated analysis

Earnings quality and crash risk in China: an integrated analysis

Dynamic modeling of marginal expected shortfall under economic sensitivity: empirical evidence from Pakistan

Gobierno corporativo en la banca internacional: Un estudio para Iberoamérica

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