Investigating the Effects of Strength of Corporate Governance Mechanisms on Systemic Risk for Financial Institutions Listed on Tehran Stock Exchange
<strong>Objective:</strong> The systemic risk is the risk of a crisis in the financial sector and its transmission to the economy. Due to the importance of social damage caused by the financial crisis, it is necessary to pay attention to the systemic risk and its factors. The purpose of...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | fas |
| Published: |
University of Tehran
2020-07-01
|
| Series: | تحقیقات مالی |
| Subjects: | |
| Online Access: | https://jfr.ut.ac.ir/article_77148_05fcf0090ce454ff73b93a0c437b0019.pdf |
| _version_ | 1819204412550152192 |
|---|---|
| author | Vali Nadi Qomi Seyed Farhang Hosseini Seyedeh Fatemeh Mostafavi |
| author_facet | Vali Nadi Qomi Seyed Farhang Hosseini Seyedeh Fatemeh Mostafavi |
| author_sort | Vali Nadi Qomi |
| collection | DOAJ |
| description | <strong>Objective:</strong> The systemic risk is the risk of a crisis in the financial sector and its transmission to the economy. Due to the importance of social damage caused by the financial crisis, it is necessary to pay attention to the systemic risk and its factors. The purpose of the present study is to investigate the effects of strength of corporate governance mechanisms on systemic risk for financial institutions listed on Tehran Stock Exchange. <br /><strong>Methods:</strong> In order to study the subject, after extracting the data of 42 financial institutions listed in the Tehran Stock Exchange during the period 1390-1394, combined data and multivariate regression model are used to test the research hypotheses. The strength of corporate governance is scored by applying TOPSIS technique based on the five criteria that as follows: percentage of institutional ownership, major shareholders and managerial investors, board size and the percentage of non-executive members of the board. The systemic risk is measured bases on the marginal expected shortfall (MES) and the expected shortfall of capital (SRISK). <br /><strong>Results:</strong> The effects of strength of corporate governance mechanisms on (MES) and (SRISK) as two indicators of systemic risk is not accepted, because it has a significant level above 5%. Also, the significant level of control variables (Size) and (Capital Ratio) indicates that larger financial institutions (with higher assets) and higher capital ratio, have greater role in the systemic risk. <br /><strong>Conclusion:</strong> The research findings show that the strength of corporate governance mechanisms does not have significant effect on the financial institutions' systemic risk. |
| first_indexed | 2024-12-23T04:35:24Z |
| format | Article |
| id | doaj.art-ae2720fd88914e8eb56f29af51ad2054 |
| institution | Directory Open Access Journal |
| issn | 1024-8153 2423-5377 |
| language | fas |
| last_indexed | 2024-12-23T04:35:24Z |
| publishDate | 2020-07-01 |
| publisher | University of Tehran |
| record_format | Article |
| series | تحقیقات مالی |
| spelling | doaj.art-ae2720fd88914e8eb56f29af51ad20542022-12-21T17:59:55ZfasUniversity of Tehranتحقیقات مالی1024-81532423-53772020-07-0122220622610.22059/frj.2020.265674.100673477148Investigating the Effects of Strength of Corporate Governance Mechanisms on Systemic Risk for Financial Institutions Listed on Tehran Stock ExchangeVali Nadi Qomi0Seyed Farhang Hosseini1Seyedeh Fatemeh Mostafavi2Assistant Prof., Department of Accounting, Institute of Higher Education Ershad Damavand, Tehran, Iran.PhD., Department of Finance, Faculty of Management and Accounting, University of Tehran, Tehran, Iran.MSc., Department of Financial Management, Institute of Higher Education Ershad Damavand, Tehran, Iran.<strong>Objective:</strong> The systemic risk is the risk of a crisis in the financial sector and its transmission to the economy. Due to the importance of social damage caused by the financial crisis, it is necessary to pay attention to the systemic risk and its factors. The purpose of the present study is to investigate the effects of strength of corporate governance mechanisms on systemic risk for financial institutions listed on Tehran Stock Exchange. <br /><strong>Methods:</strong> In order to study the subject, after extracting the data of 42 financial institutions listed in the Tehran Stock Exchange during the period 1390-1394, combined data and multivariate regression model are used to test the research hypotheses. The strength of corporate governance is scored by applying TOPSIS technique based on the five criteria that as follows: percentage of institutional ownership, major shareholders and managerial investors, board size and the percentage of non-executive members of the board. The systemic risk is measured bases on the marginal expected shortfall (MES) and the expected shortfall of capital (SRISK). <br /><strong>Results:</strong> The effects of strength of corporate governance mechanisms on (MES) and (SRISK) as two indicators of systemic risk is not accepted, because it has a significant level above 5%. Also, the significant level of control variables (Size) and (Capital Ratio) indicates that larger financial institutions (with higher assets) and higher capital ratio, have greater role in the systemic risk. <br /><strong>Conclusion:</strong> The research findings show that the strength of corporate governance mechanisms does not have significant effect on the financial institutions' systemic risk.https://jfr.ut.ac.ir/article_77148_05fcf0090ce454ff73b93a0c437b0019.pdfcorporate governanceexpected shortfall of capitalmarginal expected shortfallsystemic risktopsis |
| spellingShingle | Vali Nadi Qomi Seyed Farhang Hosseini Seyedeh Fatemeh Mostafavi Investigating the Effects of Strength of Corporate Governance Mechanisms on Systemic Risk for Financial Institutions Listed on Tehran Stock Exchange تحقیقات مالی corporate governance expected shortfall of capital marginal expected shortfall systemic risk topsis |
| title | Investigating the Effects of Strength of Corporate Governance Mechanisms on Systemic Risk for Financial Institutions Listed on Tehran Stock Exchange |
| title_full | Investigating the Effects of Strength of Corporate Governance Mechanisms on Systemic Risk for Financial Institutions Listed on Tehran Stock Exchange |
| title_fullStr | Investigating the Effects of Strength of Corporate Governance Mechanisms on Systemic Risk for Financial Institutions Listed on Tehran Stock Exchange |
| title_full_unstemmed | Investigating the Effects of Strength of Corporate Governance Mechanisms on Systemic Risk for Financial Institutions Listed on Tehran Stock Exchange |
| title_short | Investigating the Effects of Strength of Corporate Governance Mechanisms on Systemic Risk for Financial Institutions Listed on Tehran Stock Exchange |
| title_sort | investigating the effects of strength of corporate governance mechanisms on systemic risk for financial institutions listed on tehran stock exchange |
| topic | corporate governance expected shortfall of capital marginal expected shortfall systemic risk topsis |
| url | https://jfr.ut.ac.ir/article_77148_05fcf0090ce454ff73b93a0c437b0019.pdf |
| work_keys_str_mv | AT valinadiqomi investigatingtheeffectsofstrengthofcorporategovernancemechanismsonsystemicriskforfinancialinstitutionslistedontehranstockexchange AT seyedfarhanghosseini investigatingtheeffectsofstrengthofcorporategovernancemechanismsonsystemicriskforfinancialinstitutionslistedontehranstockexchange AT seyedehfatemehmostafavi investigatingtheeffectsofstrengthofcorporategovernancemechanismsonsystemicriskforfinancialinstitutionslistedontehranstockexchange |