IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Risk exposure and financial policy: An empirical analysis of emerging markets

Listed author(s):
  • Joshua Abor

Purpose - This paper aims to evaluate the effect of risk on the financial policy of emerging market firms. Design/methodology/approach - Using data from 34 emerging markets during a 17-year period, 1990-2006, a panel data model is employed for the analysis. Findings - The results of this study indicate that firms with high probability of survival are likely to employ more debt. The level of risk exposure, particularly business risk is important in influencing the financial decisions of firms in emerging market economies. It is argued that since the use of debt increases firms' exposure to financial risk, firms with high business risk would shy away from using more debt. Also, finance providers in the financial market may not be interested in lending to firms with high business risk. This study also identified profitability, dividend, asset tangibility, growth opportunities, and GDP per capita as important determinants of the financial policy of emerging market firms. Originality/value - This study contributes to the extant literature by providing empirical evidence regarding the effect of risk on the financial policy of emerging market firms.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Access to full text is restricted to subscribers

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Emerald Group Publishing in its journal Journal of Economic Studies.

Volume (Year): 36 (2009)
Issue (Month): 2 (May)
Pages: 195-211

in new window

Handle: RePEc:eme:jespps:v:36:y:2009:i:2:p:195-211
Contact details of provider: Web page:

Order Information: Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Web: Email:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eme:jespps:v:36:y:2009:i:2:p:195-211. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.