Large Shareholder Diversification And Corporate Risk-Taking

Relatore:  Maria Teresa Marchica - Manchester Business School, University of Manchester
  lunedì 22 marzo 2010 alle ore 12.30 Biblioteca DSE - Palazzina 32, ex Caserma Passalacqua

Using new data for the universe of firms covered in Amadeus, we reconstruct the equity portfolios of shareholders who hold equity stakes in private and publicly-traded European firms. We find great heterogeneity in the degree of portfolio diversification across large shareholders. Exploiting this heterogeneity, we document that firms controlled by diversified large shareholders undertake riskier investments than firms controlled by non-diversified large shareholders. The impact of large shareholder diversification on corporate risk-taking is both economically and statistically significant. Our results have important implications at the policy level because they identify one channel through which policy changes aimed at improving capital market development and diversification can improve economic welfare.
 

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Referente
Angelo Zago

Data pubblicazione
21 gennaio 2010