Dataset Information

The nexus between corporate governance, risk taking, and growth.

ABSTRACT: In this study we assess the impact of corporate governance on the risk investment behavior of firms and its implications on firms' growth rate. Using a sample of non-financial companies from 10 countries over a period leading to the recent global financial crisis, we documented that the corporate governance has a nonlinear (inverted U-shape) impact on the companies' investment risk, meaning that the investment risk is increasing up to a level of corporate governance of 0.61 (as measured by our comprehensive index), while at higher levels of corporate governance the investment risk is decreasing. For the models of sales growth and assets growth it is shown that predicted investment risk has a positive effect on firms' growth measures. Moreover, the two growth models are not moving independently and a shock to one of the growth measures (sales or assets) affects the other growth measure in the same direction. Additionally, we evaluated the effect of financial crisis on both the growth measures and the risk measure. The effect of financial crisis was captured in both measures in 2009, with higher impact on the growth of sales.

SUBMITTER: Andries AM

PROVIDER: S-EPMC6999870 | biostudies-literature | 2020

REPOSITORIES: biostudies-literature

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The nexus between corporate governance, risk taking, and growth.

Andries Alin Marius AM Balutel Daniela D Ihnatov Iulian I Ursu Silviu Gabriel SG

PloS one 20200204 2

In this study we assess the impact of corporate governance on the risk investment behavior of firms and its implications on firms' growth rate. Using a sample of non-financial companies from 10 countries over a period leading to the recent global financial crisis, we documented that the corporate governance has a nonlinear (inverted U-shape) impact on the companies' investment risk, meaning that the investment risk is increasing up to a level of corporate governance of 0.61 (as measured by our c ...[more]

PMID: 32017781

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Project description:Household water food and energy (WFE) expenditures, reflect respective survival needs for which their resources and social welfare are inter-related. We developed a policy driven quantitative decision-making strategy (DMS) to address the domain geospatial entities' (nodes or administrative districts) of the WFE nexus, assumed to be information linked across the domain nodal-network. As investment in one of the inter-dependent nexus components may cause unexpected shock to the others, we refer to the WFE normalized expenditures product (Volume) as representing the nexus holistic measure. Volume rate conforms to Boltzman entropy suggesting directed information from high to low Volume nodes. Our hypothesis of causality-driven directional information is exemplified by a sharp price increase in wheat and rice, for U.S. and Thailand respectively, that manifests its impact on the temporal trend of Israel's administrative districts of the WFE expenditures. Welfare mass (WM) represents the node's Volume combined with its income and population density. Formulation is suggested for the nodal-network WM temporal balance where each node is scaled by a human-factor (HF) for subjective attitude and a superimposed nodal source/sink term manifesting policy decision. Our management tool is based on two sequential governance processes: one starting with historical data mapping the mean temporal nodal Volumes to single out extremes, and the second is followed by WM balance simulation predicting nodal-network outcome of policy driven targeting. In view of the proof of concept by model simulations in in our previous research, here HF extends the model and attention is devoted to emphasize how the current developed decision-making approach categorically differs from existing nexus related methods. The first governance process is exemplified demonstrating illustrations for Israel's districts. Findings show higher expenditures for water and lower for energy, and maps pointing to extremes in districts' mean temporal Volume. Illustrations of domain surfaces for that period enable assessment of relative inclination trends of the normalized Water, Food and Energy directions continuum assembled from time stations, and evolution trends for each of the WFE components.

Dataset Information

The nexus between corporate governance, risk taking, and growth.

Publications

The nexus between corporate governance, risk taking, and growth.

Similar Datasets

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