RT info:eu-repo/semantics/article
T1 Corporate risk and formal institutions: is Latin America different?
A1 Lizarzaburu Bolaños, Edmundo
A1 García Gómez, Conrado Diego
A1 López Iturriaga, Félix Javier
A1 Díez Esteban, José María
K1 Corporate risk
K1 Latin America
K1 Formal institutions quality
K1 Financial constraints
K1 MILA
K1 Empresas-América Latina-Finanzas
K1 Business enterprises-Latin American-Finance
AB This study investigates the relationship between institutional quality and corporate risk in Latin America. Using a sample of 725 firms from Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Peru, and Uruguay over the period 2013-2022, we find that firms operating in countries with stronger formal institutions –as measured by the World Bank's Worldwide Governance Indicators– exhibit lower levels of corporate risk, as captured by reduced Z-scores and market volatility. These results are robust to the use of a composite index based on the six dimensions of the governance indicators and to various empirical techniques. Furthermore, our results suggest that capital market integration –measured through participation in the Latin American Integrated Market (MILA)– reinforces the risk-reducing effect of institutional quality. Moreover, the moderating influence of the MILA is particularly relevant in financially constrained firms.
PB Elsevier
SN 2214-8450
YR 2026
FD 2026
LK https://hdl.handle.net/10259/12255
UL https://hdl.handle.net/10259/12255
LA eng
DS Repositorio Institucional de la Universidad de Burgos
RD 11-oct-2026