Title: The effect of governance mechanisms on the quality of risk disclosure: using bootstrap techniques

Authors: Gehan A. Mousa; Elsayed A.H. Elamir

Addresses: Faculty of Commerce, Benha University, Qalyubia, Egypt; College of Business Administration, University of Bahrain, P.O. Box 32038, Kingdom of Bahrain ' Faculty of Commerce, Benha University, Qalyubia, Egypt; College of Business Administration, University of Bahrain, P.O. Box 32038, Kingdom of Bahrain

Abstract: The purpose of this study is to examine the effect of six corporate governance mechanisms (institutional investors, foreign investors, major investors, debt ratio, board size and board composition) on the quality of corporate risk disclosure. The study uses a sample of listed firms in the Bahraini capital market and applies bootstrap techniques as a new method of statistical analysis. The findings show that institutional investors and major investors have a significant and positive effect on the quality of corporate risk disclosure. However, board size is found to have a significant and negative effect on corporate risk disclosure. Foreign investors, board composition and debt ratio are insignificant in relation to risk disclosure. The study suggests that the bootstrap techniques are a useful tool for the purpose of approximating the sampling distribution of a statistical analysis for which the sample size is small and offers a considerable potential for modelling in complex problems.

Keywords: corporate risk disclosure; corporate governance; bootstrapping; institutional investors; foreign investors; major investors; debt ratio; board size; board composition; risk disclosure quality; modelling.

DOI: 10.1504/AJFA.2014.060811

American Journal of Finance and Accounting, 2014 Vol.3 No.2/3/4, pp.128 - 151

Received: 19 Nov 2013
Accepted: 26 Mar 2014
Published online: 11 Oct 2014 *

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