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Banks' ownership structure, risk and performance

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dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorGutiérrez Urtiaga, María
dc.contributor.authorTribo Gine, José Antonio
dc.contributor.authorMagalhaes, Rômulo
dc.date.accessioned2012-05-14T12:31:15Z
dc.date.available2012-05-14T12:31:15Z
dc.date.issued2010-05-05
dc.description.abstractThis paper studies empirically the effect of ownership concentration on the risk and performance of commercial banks, controlling for shareholders protection laws, bank regulations, and other country and bank specific traits. The sample used comprises 795 banks of 47 countries, in the period from 1997 to 2007. Our main finding is the existence of a cubic relationship between ownership concentration and bank performance. Such evidence is supportive of theoretical hypotheses of effective monitoring at low levels of ownership concentration, expropriation or losses connected to managerial discretion at moderate ownership concentration, and high costs of expropriation at high levels of ownership concentration. We also find that ownership concentration is more important to increase the performance of banks with low concentrated ownership structures, when legal protection of shareholders is low, and that capital regulations stringency is effective in simultaneously reducing risk and improving performance of banks. Regarding bank risk, we find a U-shape relationship between ownership concentration and earnings volatility, supporting that shareholder’s incentive to take risk prevails when her equity stake is above a threshold.
dc.description.sponsorshipThe authors wish to thank the financial support of the Ministerio de Ciencia y Tecnologia (grant # SEJ2006- 09401).
dc.format.mimetypeapplication/pdf
dc.identifier.bibliographicCitationSSRN working papers series, May 5 2010
dc.identifier.urihttps://hdl.handle.net/10016/14234
dc.language.isoeng
dc.publisherSSRN
dc.relation.ispartofseriesSSRN working papers series
dc.relation.publisherversionhttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1102390
dc.rights.accessRightsopen access
dc.subject.ecienciaEmpresa
dc.subject.otherBanks
dc.subject.otherOwnership structure
dc.subject.otherRisk
dc.subject.otherCorporate governance
dc.subject.otherRegulation
dc.titleBanks' ownership structure, risk and performance
dc.typeworking paper*
dc.type.hasVersionSMUR*
dspace.entity.typePublication
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