TY - JOUR
T1 - Market risk disclosures and corporate governance structure
T2 - Evidence from GCC financial firms
AU - Al-Hadi, Ahmed
AU - Al-Yahyaee, Khamis Hamed
AU - Hussain, Syed Mujahid
AU - Taylor, Grantley
N1 - Publisher Copyright:
© 2017 Board of Trustees of the University of Illinois
PY - 2019/8
Y1 - 2019/8
N2 - In this study, we examine the relationship between corporate governance and the disclosure of market risk among financial firms from the Gulf Cooperation Council (GCC) region between 2007 and 2011. Using a comprehensive measure of the disclosure of market risk, our regression results suggest that the level of market risk disclosure is positively and significantly associated with the strength of a firm's corporate governance structure. Economically, the regression coefficient implies that a 3.25% increase in market risk disclosures is associated with a one standard deviation change in the strength of corporate governance. In addition, when we decompose our corporate governance index into its constituent items, we find that directors’ independence and the dual roles of the CEO and chairman of the board reduce the extent and quality of market risk disclosures. Our results are robust to alternative specifications and endogeneity tests.
AB - In this study, we examine the relationship between corporate governance and the disclosure of market risk among financial firms from the Gulf Cooperation Council (GCC) region between 2007 and 2011. Using a comprehensive measure of the disclosure of market risk, our regression results suggest that the level of market risk disclosure is positively and significantly associated with the strength of a firm's corporate governance structure. Economically, the regression coefficient implies that a 3.25% increase in market risk disclosures is associated with a one standard deviation change in the strength of corporate governance. In addition, when we decompose our corporate governance index into its constituent items, we find that directors’ independence and the dual roles of the CEO and chairman of the board reduce the extent and quality of market risk disclosures. Our results are robust to alternative specifications and endogeneity tests.
KW - Corporate governance
KW - GCC
KW - Market risk disclosures
UR - http://www.scopus.com/inward/record.url?scp=85034616020&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85034616020&partnerID=8YFLogxK
U2 - 10.1016/j.qref.2017.11.008
DO - 10.1016/j.qref.2017.11.008
M3 - Article
AN - SCOPUS:85034616020
SN - 1062-9769
VL - 73
SP - 136
EP - 150
JO - Quarterly Review of Economics and Finance
JF - Quarterly Review of Economics and Finance
ER -