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Institutional investor horizon and bank risk-taking

Lookup NU author(s): Dr Shams PathanORCiD, Dr Mamiza Haq

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Abstract

© 2020 Elsevier B.V. We test the effect of short-term versus long-term institutional shareholding –so-called investor horizon– on bank risk-taking. We find that in contrast to banks dominated by short-term shareholders, banks with greater long-term shareholding are associated with lower risk, better stock performance, and conservative business and compensation policies. Our results imply that bank regulators should be more vigilant over the actions of banks that heavily rely on short-term shareholding.

Publication metadata

Author(s): Pathan S, Haq M, Faff R, Seymour T

Publication type: Article

Publication status: Published

Journal: Journal of Corporate Finance

Year: 2021

Volume: 66

Print publication date: 01/02/2021

Online publication date: 27/11/2020

Acceptance date: 18/11/2020

ISSN (print): 0929-1199

ISSN (electronic): 1872-6313

Publisher: Elsevier BV

URL: https://doi.org/10.1016/j.jcorpfin.2020.101794

DOI: 10.1016/j.jcorpfin.2020.101794

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