Societal trust and corporate risk-taking: International evidence

Shen, Zhe; Sowah, Joseph Sowahfio; Li, Shan

doi:10.1016/j.intfin.2021.101490

Cited by 21 publications

(7 citation statements)

References 77 publications

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“…Third, the difference of maximum and minimum value of ROA and is denoted by Crt4 (Đặng et al, 2021; Xu et al, 2022). Fifth, ratio of the research development expense to asset as denoted by Crt5 (Harjoto & Laksmana, 2018; Shen et al, 2022). Following Harjoto and Laksmana (2018), missing research and development data are replaced with a zero value and we transform the ratio in percentage to handle the small coefficient.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…It is measured using the standard deviation of adjusted-ROA (Return on Asset) that represents the return from risk arises from a company's investment decisions (Faccio et al, 2016). Meanwhile, industry adjustments is used to overcome the economic uncertainty in the industrial sphere (Shen et al, 2022). The measurement uses a five-year period to measure the adjusted-ROA standard deviation.…”

Section: Dependent Variablementioning

confidence: 99%

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Corporate waste disclosure, risk‐taking and foreign ownership: Evidence from Indonesia

Wulansari

Adhariani

2023

Bus Strat Dev

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The role of corporations in waste management can reflect the superior performance in innovation and the risk a company is willing to take to engage in the circular economy. The superior performance of corporate waste management can be reflected in the corporate disclosure as a media of accountability and transparency. This research investigates the association between waste disclosure and corporate risk-taking and the moderating role of foreign ownership in companies in Indonesia as an emerging country struggling to find an effective solution toward environmental problems, including waste. The observation was performed on non-financial companies listed on the Indonesian Stock Exchange for the period 2018-2021. Panel regression was used to find the answers to the research questions of the direct and moderate associations among corporate waste disclosure, risk-taking and foreign ownership. The results show that waste disclosure encourages increased corporate risk-taking, which means that companies that disclose waste are companies with good accountability and environmental performance and tend to take risks that can increase value. Foreign ownership was not found to statistically strengthen the relationship between waste disclosure and corporate risk-taking, which is different from the expectation that improving the transparency of waste information can attract a greater inflow of foreign investor resources. This brings implication that investors need to increase attention to the issue of corporate waste management and put pressure on companies to provide information on corporate waste performance for investment decision-making. Furthermore, the results of the study also found that waste disclosure in Indonesia is still low compared to the international disclosure standard. This research contributes to the sustainability accounting literature in developing countries by outlining the role of waste disclosure.

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Section: Hypothesis Developmentmentioning

confidence: 99%

Section: Dependent Variablementioning

confidence: 99%

Corporate waste disclosure, risk‐taking and foreign ownership: Evidence from Indonesia

Wulansari

Adhariani

2023

Bus Strat Dev

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“…Proceeding from this, business researchers have further maintained that information transparency constitutes a source of competitive advantages for companies, especially those operating in a B2B setting that requires significant trust and relationship building (Key and Challagalla, 2020). Despite the potential strategic benefits of information transparency, it is important to acknowledge that achieving optimal information transparency is a complex endeavor that depends on various factors, including industry norms, regulatory requirements, organizational culture, and managerial discretion (Shen et al ., 2022).…”

Section: Literature Reviewmentioning

confidence: 99%

Impacts of investment relations service quality on corporate information transparency and intangible value: the moderating role of competitive intensity

Chan,

Shen,

Cheng

et al. 2024

MIP

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PurposeThis study aims at proposing and testing a model delineating how and when the quality of a special B2B professional service, investment relations (IR), would drive corporate intangible value.Design/methodology/approachThis study employs a proprietary dataset on voting records of an annual investment relations (IR) awards event and the corresponding company-level archival data for analysis. Regression analysis is used to test hypotheses.FindingsIR service quality not only directly enhances corporate intangible value, but also indirectly boosts it via information transparency. While competitive intensity does not moderate the relationship between IR service quality and corporate intangible value, its moderating effect on the relationship between information transparency and this value is negative.Research limitations/implicationsThe findings advance academic understanding of the mechanism and boundary conditions underlying the complex and dynamic relationships among IR service quality, information transparency, corporate intangible value and competitive intensity. Future research endeavors to verify the present findings in other service and/or geographic settings would help establish their external validity.Practical implicationsThe findings advise companies to expand the traditional role of IR by taking it as a powerful communication and relationship marketing tool to improve their visibility and attract investors.Social implicationsThe findings suggest that superior IR service would strengthen the company’s social bonding with institutional investors and effectively signal to them its commitment to good corporate governance practices.Originality/valueMatching a proprietary dataset on IR voting records with the corresponding company-level archival data over a five-year period to investigate the performance implications of IR service quality within the Hong Kong context rectifies methodological limitation and geographic confinement of prior IR research.

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“…Huang et al 18 study the clan culture in China and claim that higher clan culture can limit corporate risk-taking behavior. Shen et al 19 demonstrate that social trust has a significant role in decreasing corporate risk-taking. Khieu et al 20 also suggest that corruption culture can deter firms from making risky investments, resulting in lower risk-taking.…”

Section: Introductionmentioning

confidence: 99%

The effect of city reputation on Chinese corporate risk-taking

Li,

Jiang

2024

Sci Rep

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City reputation is a valuable asset for the local economy and firms in the contemporary society. However, the impact of city reputation on micro-level firms has been largely overlooked by the literature. This paper uses the National Civilized City (NCC) policy in China as a quasi-natural experiment to enhance city reputation. We employ the DID approach to investigate the relationship between city reputation and corporate risk-taking. The result shows that corporate risk-taking significantly increases following the NCC policy adoption. Moreover, information asymmetry can strengthen the positive impact of city reputation on corporate risk-taking. Channel tests show that city reputation improves financial condition and decreases default risk, leading to improved risk-taking tolerance. Overall, our paper indicates that city reputation is an important mechanism to improve corporate financial performance, providing empirical evidence for local governments to pursue the NCC title.

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Societal trust and corporate risk-taking: International evidence

Cited by 21 publications

References 77 publications

Corporate waste disclosure, risk‐taking and foreign ownership: Evidence from Indonesia

Corporate waste disclosure, risk‐taking and foreign ownership: Evidence from Indonesia

Impacts of investment relations service quality on corporate information transparency and intangible value: the moderating role of competitive intensity

The effect of city reputation on Chinese corporate risk-taking

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