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

Zhenghui Li, Bin Chen, Siting Lu and Gaoke Liao

International Review of Economics & Finance, 2024, vol. 92, issue C, 1526-1544

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.

Keywords: Cross-shareholdings; Financial institutions; Social networks; Risk-taking (search for similar items in EconPapers)
JEL-codes: G01 G18 G20 G32 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:92:y:2024:i:c:p:1526-1544

DOI: 10.1016/j.iref.2024.02.080

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