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Globalization of corporate risk taking

Author

Listed:
  • Valentina Bruno

    (Kogod School of Business, American University, Washington DC, USA)

  • Hyun Song Shin

    (Princeton University, Princeton, NJ, USA)

Abstract

We explore how the interconnected nature of global finance affects corporate risk taking. We show that a common global factor known to be associated with fluctuations in cross-border banking is also strongly associated with common co-movements in corporate risk-taking across a diverse universe of international firms. Our study contributes to the international business literature as the first comprehensive investigation of how global financial conditions induce greater synchronization of risk-taking across regions and sectors.

Suggested Citation

  • Valentina Bruno & Hyun Song Shin, 2014. "Globalization of corporate risk taking," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(7), pages 800-820, September.
    • Handle: RePEc:pal:jintbs:v:45:y:2014:i:7:p:800-820
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    Cited by:

    1. Díez-Esteban, José María & Farinha, Jorge Bento & García-Gómez, Conrado Diego, 2016. "The role of institutional investors in propagating the 2007 financial crisis in Southern Europe," Research in International Business and Finance, Elsevier, vol. 38(C), pages 439-454.
    2. Stefan Avdjiev & Valentina Bruno & Catherine Koch & Hyun Song Shin, 2019. "The Dollar Exchange Rate as a Global Risk Factor: Evidence from Investment," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(1), pages 151-173, March.
    3. José María Díez-Esteban & Jorge Bento Farinha & Conrado Diego García-Gómez, 2019. "How does national culture affect corporate risk-taking?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(1), pages 49-68, March.
    4. Gao, Xin & Xu, Weidong & Li, Donghui, 2022. "Media coverage and corporate risk-taking: International evidence," Journal of Multinational Financial Management, Elsevier, vol. 65(C).
    5. Lee, Jeoung Yul & Yang, Young Soo & Park, Byung Il, 2020. "Interplay between dual dimensions of knowledge sharing within globalized chaebols: The moderating effects of organization size and global environmental munificence," International Business Review, Elsevier, vol. 29(6).
    6. Dyna Heng & Anna Ivanova & Rodrigo Mariscal & Ms. Uma Ramakrishnan & Joyce Wong, 2016. "Advancing Financial Development in Latin America and the Caribbean," IMF Working Papers 2016/081, International Monetary Fund.
    7. Ruth V. Aguilera & Valentina Marano & Ilir Haxhi, 2019. "International corporate governance: A review and opportunities for future research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 457-498, June.
    8. Likitwongkajon, Napaporn & Vithessonthi, Chaiporn, 2022. "Internationalization, foreign exchange exposure and firm risk," International Review of Financial Analysis, Elsevier, vol. 83(C).
    9. Zhu, Bing & Betzinger, Michael & Sebastian, Steffen, 2017. "Housing market stability, mortgage market structure, and monetary policy: Evidence from the euro area," Journal of Housing Economics, Elsevier, vol. 37(C), pages 1-21.
    10. Purkayastha, Anish & Kumar, Vikas, 2021. "Internationalization through foreign listing: A review and future research agenda," Journal of World Business, Elsevier, vol. 56(3).
    11. Adachi-Sato, Meg & Vithessonthi, Chaiporn, 2019. "Corporate debt maturity and future firm performance volatility," International Review of Economics & Finance, Elsevier, vol. 60(C), pages 216-237.
    12. Cœuré, Benoît, 2016. "The internationalisation of monetary policy," Journal of International Money and Finance, Elsevier, vol. 67(C), pages 8-12.
    13. Debao Dai & Shengnan Han & Min Zhao & Jiaping Xie, 2023. "The Impact Mechanism of Digital Transformation on the Risk-Taking Level of Chinese Listed Companies," Sustainability, MDPI, vol. 15(3), pages 1-20, January.
    14. Yao Axel Ehouman, 2020. "Do oil-market shocks drive global liquidity?," EconomiX Working Papers 2020-33, University of Paris Nanterre, EconomiX.
    15. Yadong Luo, 2022. "A general framework of digitization risks in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(2), pages 344-361, March.
    16. Adachi-Sato, Meg & Vithessonthi, Chaiporn, 2019. "Corporate debt maturity and future firm performance volatility," International Review of Economics & Finance, Elsevier, vol. 60(C), pages 216-237.

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