Production Suspension, Corporate Governance, and Firm Value

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This study investigates the effects of planned and unplanned production suspension on firm value. We find that the increased business risk caused by the production suspension negatively affects firm value. Additionally, good corporate governance alleviates the negative effect of planned suspensions, while only firm-specific factors affect unplanned suspensions. Moreover, among firms facing unplanned suspensions, those with strong governance recover faster than firms with weak governance because the former have stable managerial structures. Finally, business group-affiliated firms cope with planned production suspensions well, whereas they are more vulnerable to unplanned suspensions. The result suggests that the group-level supplier-demander relationships have potential business risk owing to low flexibility in unexpected business situations.
Publisher
ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
Issue Date
2022-08
Language
English
Article Type
Article
Citation

EMERGING MARKETS FINANCE AND TRADE, v.58, no.10, pp.2711 - 2735

ISSN
1540-496X
DOI
10.1080/1540496X.2021.1984227
URI
http://hdl.handle.net/10203/297062
Appears in Collection
MG-Journal Papers(저널논문)
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