Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53851
Authors: 
Paligorova, Teodora
Year of Publication: 
2010
Series/Report no.: 
Bank of Canada Working Paper 2010,3
Abstract: 
This paper investigates the determinants of corporate risk taking. Shareholders with substantial equity ownership in a single company may advocate conservative investment policies due to greater exposure to firm risk. Using a large cross-country sample, I find a positive relationship between corporate risk taking and equity ownership of the largest shareholder. This result is entirely driven by investors holding the largest equity stakes in more than one company. Family shareholders avoid corporate risk taking as their ownership increases unlike mutual funds, banks, financial and industrial companies. Stronger legal protection of shareholder rights is associated with more risk taking, while stronger legal protection of creditor rights reduces risk taking.
Subjects: 
Financial markets
International topics
JEL: 
G34
G31
Document Type: 
Working Paper

Files in This Item:
File
Size
275.01 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.