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The impact of financial institutions' cross-shareholdings on risk-taking

Author

Listed:
  • Li, Zhenghui
  • Chen, Bin
  • Lu, Siting
  • Liao, Gaoke
Abstract
The complex network associations formed by cross-shareholdings of financial institutions have affected the risk-taking of financial institutions, and have gained considerable attention in the realm of finance and corporate governance. This article uses 40 Chinese financial institutions listed on A-shares from 2012 to 2021 as data samples, using social network and panel regression to analyze the impact of cross-shareholdings of financial institutions on risk-taking. The research results show that: First, cross-shareholding intensity can reduce the risk-taking level of financial institutions. Second, the intensity of cross-shareholdings reduces the risk-taking level of financial institutions by increasing the level of diversified income. Third, securities companies have the best effect of reducing risk-taking levels through cross-shareholdings, followed by banks, and insurance institutions are relatively poor.

Suggested Citation

  • Li, Zhenghui & Chen, Bin & Lu, Siting & Liao, Gaoke, 2024. "The impact of financial institutions' cross-shareholdings on risk-taking," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 1526-1544.
    • Handle: RePEc:eee:reveco:v:92:y:2024:i:c:p:1526-1544
    DOI: 10.1016/j.iref.2024.02.080
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    More about this item

    Keywords

    Cross-shareholdings; Financial institutions; Social networks; Risk-taking;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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