Corporate Governance and Safety in the Aviation Industry

48 Pages Posted: 22 Nov 2022

See all articles by Pedram Fardnia

Pedram Fardnia

Independent

Hamed Khadivar

Department of Finance, Université du Québec à Montréal

Thomas Walker

Concordia University, Quebec

Date Written: November 15, 2022

Abstract

This study examines the impact of corporate governance on airline safety. Using data from seventy countries during the period 1990 to 2016, we observe a negative relationship between indicators of quality of corporate governance and the accident rate of an airline. Specifically, our results suggest that airlines with less qualified and busier directors, as well as airlines with a higher degree of director succession, are subject to more frequent accidents. Alternatively, the longer the tenure of the CEO, the lower the number of accidents. As might be expected, the results also show that airlines based in countries with more stringent legal regulations, stronger law enforcement, and better air transport infrastructure have better safety performance.

Keywords: Corporate governance, Airline accidents, Aviation safety, Government Policy and Regulation

JEL Classification: G30 G38 G34

Suggested Citation

Fardnia, Pedram and Khadivar, Hamed and Walker, Thomas, Corporate Governance and Safety in the Aviation Industry (November 15, 2022). Available at SSRN: https://ssrn.com/abstract=4277654 or http://dx.doi.org/10.2139/ssrn.4277654

Pedram Fardnia

Independent

Hamed Khadivar (Contact Author)

Department of Finance, Université du Québec à Montréal ( email )

Case postale 8888
Succursale Centre-ville
Montreal, Quebec H3C 3P8
Canada
5147549199 (Phone)

Thomas Walker

Concordia University, Quebec

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