Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119485
Authors: 
Baert, Lieven
Vennet, Rudi Vander
Year of Publication: 
2009
Series/Report no.: 
FINESS Working Paper D.2.2
Abstract: 
We investigate whether or not banks play a positive role in the ownership structure of European listed firms. We distinguish between banks and other institutional investors as shareholders and examine empirically the relationship between financial institution ownership and the performance of the firms in which they hold equity. Our main finding is that after controlling for the capital structure decision of the firms and the ownership decision of financial institutions in a simultaneous equations model, we find that there is a negative relationship between financial institution ownership and the market value of firms, measured as the Tobin's Q. This is in contradiction with the monitoring hypothesis.
Subjects: 
Financial institution ownership
Firm value
Capital structure
JEL: 
G32
G20
Document Type: 
Working Paper

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