Do banks matter for the risk of a firm's investment portfolio? Evidence from foreign direct investment programs

Marie-Ann Betschinger

Strategic Management Journal, 2015, vol. 36, issue 8, 1264-1276

Abstract: type="main" xml:id="smj2302-abs-0001"> The study explores the role of banks as debt and equity holders for the riskiness of a firm's investment strategy using a panel of Japanese firms in the electronics industry in the period 1992–2004 for the empirical analysis. Based on a conceptual framework grounded in agency and financial intermediation theories, we find that a larger involvement of banks as debt holders in a firm is associated with lower foreign direct investment portfolio risk, while the shareholdings of universal banks increase it, supporting the theoretical predictions. Copyright © 2014 John Wiley & Sons, Ltd.

Date: 2015
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