Speaker: Prof.LI Donghui(Management School, Jinan University）

Time: 9:30-11:30,10Nov. 2016(Thursday)

Site: B253

Abstract: Using a large sample of 48,548 firms in 72 countries from 2000 to 2008, we examine the effect of foreign institutional ownership on corporate risk-taking and document a positive impact. It is further shown that only when foreign institutional owners are from developed countries, can they encourage corporate risk-taking, regardless whether the invested firm is located in a developed or a developing country. This demonstrates a governance “travelling” effect. Moreover, foreign institutional ownership is found to be a substitute for country-level corporate governance in determining corporate risk-taking. Various robustness tests and careful considerations of endogeneity confirm our main conclusions.