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Lookup NU author(s): Dr Mamiza Haq, Dr Shams PathanORCiD
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND).
© 2023 The Authors. Journal of Business Finance & Accounting published by John Wiley & Sons Ltd. We examine the relation between institutional investors’ horizons and bank transparency. The novelty of this research is to consider three important aspects of transparency: disclosure quality, private information gathering and auditor fees. We find strong evidence indicating that banks dominated by long-term (short-term [ST]) institutional shareholders exhibit higher (lower) levels of disclosure quality. However, there is no evidence that investor horizon has a differential effect on private information gathering and audit pricing. The study employs alternative proxies and estimations such as two-stage least squares and propensity score matching to address endogeneity. We also document that banks with higher ST institutional shareholding are associated with lower crash risk. These findings are particularly significant because poor bank transparency has been identified as a contributing factor to the 2007–2009 financial crisis.
Author(s): Haq M, Pathan S, Mendez CF, Lobo GJ
Publication type: Article
Publication status: Published
Journal: Journal of Business Finance and Accounting
Year: 2024
Volume: 51
Issue: 5-6
Pages: 1378-1407
Print publication date: 04/06/2024
Online publication date: 24/09/2023
Acceptance date: 04/08/2023
Date deposited: 21/12/2023
ISSN (print): 0306-686X
ISSN (electronic): 1468-5957
Publisher: John Wiley and Sons Inc.
URL: https://doi.org/10.1111/jbfa.12749
DOI: 10.1111/jbfa.12749
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