The Effect of Corporate Governance on Firm Stock Volatility in Asia |
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Authors: | See-Nie Lee Fauziah Md Taib |
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Affiliation: | Universiti Sains Malaysia, Penang, Malaysia |
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Abstract: | The authors examine whether firm corporate governance (CG) contributes to lower stock-return volatility. Using the panel data of 1,252 public listed firms in Asia across 11 countries for 15 years, the authors document international evidence that CG has a stabilizing effect on firm stock-return volatility. The authors further examine whether increasing information efficiency, reducing foreign exposure, and a lower cost of capital contribute to the stabilizing effect of firm CG on stock-return volatility. The result implies that better CG will only reduce stock-return volatility for firms that have less foreign exposure. |
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Keywords: | corporate governance firm volatility informational efficiency cost of capital Asia |
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