Corporate Risk around the World

Claessens, Stijn ; Djankov, Simeon ; Nenova, Tatiana

World Bank, Washington, DC

关键词: ACCOUNTING;    AGENCY PROBLEMS;    ASYMMETRIC INFORMATION;    BALANCE SHEET;    BANKING SYSTEM;   

DOI  :  10.1596/1813-9450-2271
RP-ID  :  WPS2271

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Weaknesses in the corporate sector haveincreasingly been cited as important factors in financialcrises in both emerging markets and industrial countries.Analysts have pointed to weak corporate performance andrisky financing patterns as major causes of the East Asianfinancial crisis. And some have argued that company balancesheet problems may also have played a role, independent ofmacroeconomic or other weaknesses, including poor corporatesector performance. But little is known about the empiricalimportance of firm financing choices in predicting andexplaining financial instability. Firm financing patternshave long been studied by the corporate finance literature.Financing patterns have traditionally been analyzed in theModigliani-Miller framework, expanded to incorporate taxesand bankruptcy costs. More recently, asymmetric informationissues have drawn attention to agency costs and their impacton firm financing choices. There is also an importantliterature relating financing patterns to firm performanceand governance. Several recent studies have focused onidentifying systematic cross-country differences in firmfinancing patterns - and the effects of these differences onfinancial sector development and economic growth. They havealso examined the causes of different financing patterns,particularly countries' legal and institutionalenvironments. The literature has devoted little attention tocorporate sector risk characteristics, however, aside fromleverage and debt maturity considerations. Even thesemeasures have been the subject of few empiricalinvestigations, mainly because of a paucity of data oncorporate sectors around the world. Building on data thathave recently become available, the authors try to fill thisgap in the literature and shed light on the riskcharacteristics of corporate sectors around the world. Theyinvestigate how corporate sectors' financial andoperating structures relate to the institutional environmentin which they operate, using data for more than 11,000 firmsin 46 countries. They show that: 1) the origins of acountry's laws, the strength of its equity and creditorrights, and the nature of its financial system can accountfor the degree of corporate risk-taking. 2) In particular,corporations in common law countries and market-basedfinancial systems have less risky financing patterns. 3)Stronger protection of equity and creditor rights is alsoassociated with less financial risk.