The Impact of Financial Risk on Systematic Risks: International Evidence

Journal of Applied Finance & Banking, Vol.9, No.6 (2019)

14 Pages Posted: 22 Jul 2019 Last revised: 25 Jul 2019

See all articles by Osama Wagdi

Osama Wagdi

Modern University for Technology and Information (MTI)

Yasmeen Tarek

Ain Shams University

Date Written: July 18, 2019

Abstract

The study focused on the impact of the short-term and long-term financial risk on systematic risks through analyzing 120 corporations listed in the international and emerging stock exchange markets of the United States, Germany, South Korea, and Egypt, (30 corporations from each country). The variability in common stock’s systematic risks was explained by 93.58% according to short and long-term financial risk under two control variables which are market capitalization of the corporation and the efficiency of the stock exchange. When our results were compared to those of Hamada, 1972, Lee and Jang, 2007, and Alaghi, 2011, the study found that short-term financial risk increased which was explained by common stock’s systematic risk. Finally, the study found a relationship between each the short and long-term financial risk on one hand and a common stock’s systematic risk on another hand.

Keywords: financial risk

JEL Classification: G32

Suggested Citation

Wagdi, Osama and Tarek, Yasmeen, The Impact of Financial Risk on Systematic Risks: International Evidence (July 18, 2019). Journal of Applied Finance & Banking, Vol.9, No.6 (2019). Available at SSRN: https://ssrn.com/abstract=3422505

Osama Wagdi (Contact Author)

Modern University for Technology and Information (MTI) ( email )

El-Hadaba El Wosta, Zone 5
Cairo
Egypt

Yasmeen Tarek

Ain Shams University

Cairo
Egypt

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