Corporate Governance and Corporate Financing and Investment during the 2007‐2008 Financial Crisis. Issue 1 (22nd December 2014)

• Record Type: Journal Article
• Authors: Nguyen, Tu; Nguyen, H.G. (Lily); Yin, Xiangkang
• Is Part Of: Financial management. Volume 44:Issue 1(2015:Spring)
• Page Start: 115
• Page End: 146
• Publication Date: 2014-12-22
• Subjects: Corporations -- Finance -- Periodicals; 658.1505
• DOI: 10.1111/fima.12071
• Languages: English
• ISSNs: 0046-3892

Abstract

<abstract abstract-type="main"> <title> <x xml:space="preserve">Abstract</x> </title> <p> <italic>We examine the impact of the 2007‐2008 financial crisis on nonfinancial firms' financing and investment activities and the role of corporate governance in alleviating the adverse consequences of the external capital supply shock. Employing a difference‐in‐differences research design, we find that better governance mitigates the disruption caused by the bank credit supply shock to firms' financing and investment activities. A variety of robustness tests suggest that our findings are unlikely to be driven by an endogeneity problem. We obtain similar results when we extend the sample period to include the delayed spillover from the banking sector to other capital market sectors</italic>.</p> </abstract>