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The effect of governance mechanisms on the quality of risk disclosure: using bootstrap techniques

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  • Gehan A. Mousa
  • Elsayed A.H. Elamir

Abstract

The purpose of this study is to examine the effect of six corporate governance mechanisms (institutional investors, foreign investors, major investors, debt ratio, board size and board composition) on the quality of corporate risk disclosure. The study uses a sample of listed firms in the Bahraini capital market and applies bootstrap techniques as a new method of statistical analysis. The findings show that institutional investors and major investors have a significant and positive effect on the quality of corporate risk disclosure. However, board size is found to have a significant and negative effect on corporate risk disclosure. Foreign investors, board composition and debt ratio are insignificant in relation to risk disclosure. The study suggests that the bootstrap techniques are a useful tool for the purpose of approximating the sampling distribution of a statistical analysis for which the sample size is small and offers a considerable potential for modelling in complex problems.

Suggested Citation

  • Gehan A. Mousa & Elsayed A.H. Elamir, 2014. "The effect of governance mechanisms on the quality of risk disclosure: using bootstrap techniques," American Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 3(2/3/4), pages 128-151.
    • Handle: RePEc:ids:amerfa:v:3:y:2014:i:2/3/4:p:128-151
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    Cited by:

    1. Rihab Grassa & Nejia Moumen & Khaled Hussainey, 2021. "What drives risk disclosure in Islamic and conventional banks? An international comparison," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 6338-6361, October.

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