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Risk Attitudes In The Board Room And Company Performance: Evidence For An Emerging Economy

Author

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  • DENICE BODEUTSCH

    (Anton de Kom University of Suriname, Paramaribo, Suriname)

  • PHILIP HANS FRANSES

    (Econometric Institute, Erasmus University Rotterdam, 3000 DR Rotterdam, The Netherlands)

Abstract

We personally interview thirteen board members of seven (out of the ten) companies listed at the Suriname Stock Exchange and ask questions about their past and current decisions and on their risk attitudes. Next, we correlate the answers to company performance in between 2003–2011, like earnings per share, stock returns, book value and market value. Recent literature on risk attitudes in the board, which usually draws on western economies, guides our formulation of hypotheses. At the same time we also perform some exploratory analyses. Our main result is that, for this emerging economy, more risk adversity leads to better firm performance.

Suggested Citation

  • Denice Bodeutsch & Philip Hans Franses, 2016. "Risk Attitudes In The Board Room And Company Performance: Evidence For An Emerging Economy," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 11(04), pages 1-14, December.
    • Handle: RePEc:wsi:afexxx:v:11:y:2016:i:04:n:s2010495216500196
    DOI: 10.1142/S2010495216500196
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    More about this item

    Keywords

    Executives characteristics; Company performance; Risk attitudes; Emerging economy;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G00 - Financial Economics - - General - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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