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    Corporate Risk-Taking, Foreign Institutional Ownership, and the Role of Country-Level Corporate Governance

    December,06,2019        

    Theme: Corporate Risk-Taking, Foreign Institutional Ownership, and the Role of Country-Level Corporate Governance

    Speaker: Donghui Li (College of Economics, Shenzhen University)

    Host: Ning Hu (School of Accounting, SWUFE)

    Time: 9:00-10:30a.m., December 6, 2019, Friday

    Place: Room D301, Tongbo Building, Liulin Campus

    Sponsor: Academic Research Office, School of Accounting

    Introduction of the speaker:

    Donghui Li, doctoral Supervisor and distinguished professor from College of Economics, Shenzhen University. He got the bachelor from Wuhai University and Ph.D. from The University of New South Wales. His research interests include corporate finance management and shareholder structure. He has published many papers in Journal of Finance, Journal of Financial and Quantitative Analysis, Journal of International Business Studies, Journal of Banking and Finance, Journal of Corporate Finance, Journal of International Money and Finance, Journal of Risk and Insurance, Journal of Business Finance & Accounting, Economic Research, etc. He is the referee of Journal of Banking and Finance, Journal of Risk and Insurance, etc.

    Abstract:

    Employing a large sample of 17,698 firms across 42 countries spanning the years 2000 to 2015, we show that foreign institutional ownership (FIO) positively influences corporate risk-taking, and this positive relation is achieved through both direct and indirect channels. In addition, FIO is found to be a substitute for country-level corporate governance in determining corporate risk-taking, indicating that foreign institutional investors play a significant role in motivating managers to take risk in countries with weaker corporate governance. Various robustness tests and careful considerations of endogeneity confirm our main conclusions.

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