Did corporate governance safeguard investor interest in the global financial crisis? Evidence from Hong Kong SAR
Document Type
Journal article
Source Publication
Asia Pacific Business Review
Publication Date
2015
Volume
21
Issue
4
First Page
534
Last Page
550
Keywords
Asia-Pacific; China; board of directors; corporate governance; financial crisis; Hong Kong SAR; market performance; ownership structure; PRC
Abstract
The global financial crisis of 2008 aroused renewed interest in the effectiveness of corporate governance mechanisms to safeguard investor interests. In this paper, we measure the effects of the crisis from 2008 to 2009 on the share performance of 976 companies listed on the Hong Kong Stock Exchange in the Hong Kong SAR and examine the link between share performance and corporate governance mechanisms. Our results present evidence that firms with a higher proportion of independent directors and a greater concentration of ownership had lower share performance, but lower price volatility, during the global financial crisis. These results suggest that no single corporate governance mechanism is fit for all economic environments and time frames. To strengthen investors' confidence, companies should enhance the efficiency and adaptability of their governance mechanisms in turbulent times.
DOI
10.1080/13602381.2015.1030253
Print ISSN
13602381
E-ISSN
1743792X
Publisher Statement
Copyright © 2015 Taylor & Francis.
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Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Cheng, S., Lui, G., & Shum, C. (2015). Did corporate governance safeguard investor interest in the global financial crisis? Evidence from Hong Kong SAR. Asia Pacific Business Review, 21(4), 534-550. doi: 10.1080/13602381.2015.1030253