Economic Policy Uncertainty and Corporate Risk-taking in Russian Companies: The Role of Corporate Governance

Regina  Gataullina; Maria Kokoreva

doi:10.17323/j.jcfr.2073-0438.19.2.2025.38-52

Regina Gataullina HSE University, Moscow, Russia https://orcid.org/0009-0000-2731-8842
Maria Kokoreva HSE University, Moscow, Russia https://orcid.org/0000-0001-5919-2332

DOI: https://doi.org/10.17323/j.jcfr.2073-0438.19.2.2025.38-52

Keywords: corporate risk-taking, corporate governance, economic policy uncertainty, board of directors, state ownership, emerging markets

Abstract

This study investigates the relationship between economic policy uncertainty (EPU) and corporate risk-taking in Russian firms, focusing on the moderating effects of corporate governance mechanisms. Using a panel dataset of 126 companies listed on the Moscow Exchange Broad Market Index from 2010 to 2021, the study applies a fixed-effects model to examine how corporate governance factors, including board independence, the presence of a risk committee, and state ownership, influence corporate risk-taking under conditions of economic uncertainty. The results show that economic policy uncertainty is positively related to risk-taking, with corporate governance characteristics moderating this relationship. Specifically, higher board independence and the presence of a dedicated risk committee are associated with reduced risk-taking in periods of increased uncertainty. Conversely, state-owned enterprises (SOEs) exhibit a higher propensity for risk-taking due to the security provided by government backing. These findings contribute to the growing literature on corporate governance and risk management, particularly in emerging markets. This research provides practical insights for corporate managers and policymakers, suggesting the need for tailored governance structures to mitigate risk in volatile economic environments.

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