The Effects of Corporate Governance on Idiosyncratic Risk: Evidence from Financial Institutions in Taiwan
Hsien-Ming Chen, Chu-Hsiung Lin, Tzu-Chuan Kao, Tsun-Jen Wei

We employ a dynamic panel data model to examine the effects of corporate governance mechanisms on idiosyncratic risk. Our results show that the firms with better corporate governance mechanisms (including more independent board, better transparency) tend to have a lower idiosyncratic risk using the data of Taiwanese financial institutions from 2006:Q1 to 2012:Q4. However, firms with higher foreign ownership appear to have a higher idiosyncratic risk.

Full Text: PDF     DOI: 10.15640/jfbm.v4n2a3