Institutional investor horizon and bank risk-taking

Shams Pathan*, Mamiza Haq, Robert Faff, Trent Seymour

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

1 Citation (Scopus)

Abstract

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.

Original languageEnglish
Article number101794
JournalJournal of Corporate Finance
Volume66
DOIs
Publication statusPublished - Feb 2021
Externally publishedYes

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