RT Generic
T1 Banks' ownership structure, risk and performance
A1 Gutiérrez Urtiaga, María
A1 Tribo Gine, José Antonio
A1 Magalhaes, Rômulo
AB This paper studies empirically the effect of ownership concentration on the risk andperformance of commercial banks, controlling for shareholders protection laws, bankregulations, and other country and bank specific traits. The sample used comprises 795 banksof 47 countries, in the period from 1997 to 2007. Our main finding is the existence of a cubicrelationship between ownership concentration and bank performance. Such evidence issupportive of theoretical hypotheses of effective monitoring at low levels of ownershipconcentration, expropriation or losses connected to managerial discretion at moderateownership concentration, and high costs of expropriation at high levels of ownershipconcentration. We also find that ownership concentration is more important to increase theperformance of banks with low concentrated ownership structures, when legal protection ofshareholders is low, and that capital regulations stringency is effective in simultaneouslyreducing risk and improving performance of banks. Regarding bank risk, we find a U-shaperelationship between ownership concentration and earnings volatility, supporting thatshareholder’s incentive to take risk prevails when her equity stake is above a threshold.
PB SSRN
YR 2010
FD 2010-05-05
LK https://hdl.handle.net/10016/14234
UL https://hdl.handle.net/10016/14234
LA eng
NO The authors wish to thank the financial support of the Ministerio de Ciencia y Tecnologia (grant # SEJ2006-09401).
DS e-Archivo
RD 3 may. 2024