The Influence of Ownership Structure on Risk Management: Evidence from New Zealand State Owned Enterprises

15 Pages Posted: 15 Apr 2014

See all articles by Henk Berkman

Henk Berkman

University of Auckland - Business School

Michael E. Bradbury

Massey University

Date Written: June 1998

Abstract

This paper examines how recent theories on risk management apply to government owned organizations. We argue that, compared to publicly listed firms, government owned organizations have a lower need for risk management since stakeholders are likely to rely on implicit guarantees arising from government ownership. We test this proposition empirically and find that government owned organizations make less use of financial derivatives to reduce the costs of financial distress and agency conflicts. In general our findings provide strong support for the modern theories of risk management.

Suggested Citation

Berkman, Henk and Bradbury, Michael E., The Influence of Ownership Structure on Risk Management: Evidence from New Zealand State Owned Enterprises (June 1998). Journal of International Financial Management & Accounting, Vol. 9, Issue 2, pp. 117-131, 1998. Available at SSRN: https://ssrn.com/abstract=2425004 or http://dx.doi.org/10.1111/1467-646X.00033

Henk Berkman (Contact Author)

University of Auckland - Business School ( email )

Private Bag 92019
Room: 577
Auckland
New Zealand
(64 9) 3737599 Ext. 7181 (Phone)
(64 9) 3737406 (Fax)

Michael E. Bradbury

Massey University ( email )

School of Accountancy
Private Bag 102 904
Auckland
New Zealand
64 9 414 0800 (Phone)
64 9 441 8133 (Fax)

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