Arbeitspapier
Corporate risk taking and ownership structure
This paper investigates the determinants of corporate risk taking. Shareholders with substantial equity ownership in a single company may advocate conservative investment policies due to greater exposure to firm risk. Using a large cross-country sample, I find a positive relationship between corporate risk taking and equity ownership of the largest shareholder. This result is entirely driven by investors holding the largest equity stakes in more than one company. Family shareholders avoid corporate risk taking as their ownership increases unlike mutual funds, banks, financial and industrial companies. Stronger legal protection of shareholder rights is associated with more risk taking, while stronger legal protection of creditor rights reduces risk taking.
- Language
-
Englisch
- Bibliographic citation
-
Series: Bank of Canada Working Paper ; No. 2010-3
- Classification
-
Wirtschaft
Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
- Subject
-
Financial markets
International topics
Unternehmensentwicklung
Risikopräferenz
Eigentümerstruktur
Unternehmensfinanzierung
Familienunternehmen
Welt
- Event
-
Geistige Schöpfung
- (who)
-
Paligorova, Teodora
- Event
-
Veröffentlichung
- (who)
-
Bank of Canada
- (where)
-
Ottawa
- (when)
-
2010
- DOI
-
doi:10.34989/swp-2010-3
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Paligorova, Teodora
- Bank of Canada
Time of origin
- 2010
Other Objects (12)
Macroeconomic experiences and risk taking of euro area households
Credit risk transfer and bank insolvency risk
Corporate debt composition and business cycles
Volatility risk and economic welfare
Family ownership, corporate governance and risk-taking
Complex ownership and capital structure
Reputational risk management in central banks
Extreme downside risk in asset returns
Rollover risk, liquidity and macroprudential regulation
Managing risk taking with interest rate policy and macroprudential regulations
How important is liquidity risk for sovereign bond risk premia? Evidence from the London Stock Exchange
Macroeconomic determinants of the term structure of corporate spreads
Macroeconomic experiences and risk taking of euro area households
Credit risk transfer and bank insolvency risk
Corporate debt composition and business cycles
Volatility risk and economic welfare
Family ownership, corporate governance and risk-taking
Complex ownership and capital structure
Reputational risk management in central banks
Extreme downside risk in asset returns
Rollover risk, liquidity and macroprudential regulation
Managing risk taking with interest rate policy and macroprudential regulations
How important is liquidity risk for sovereign bond risk premia? Evidence from the London Stock Exchange
Macroeconomic determinants of the term structure of corporate spreads
Macroeconomic experiences and risk taking of euro area households
Credit risk transfer and bank insolvency risk
Corporate debt composition and business cycles
Volatility risk and economic welfare
Family ownership, corporate governance and risk-taking
Complex ownership and capital structure
Reputational risk management in central banks
Extreme downside risk in asset returns
Rollover risk, liquidity and macroprudential regulation
Managing risk taking with interest rate policy and macroprudential regulations
How important is liquidity risk for sovereign bond risk premia? Evidence from the London Stock Exchange