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The Effect of Multiple Large Shareholders on Banks’ Profitability and Risk

Maria Gaia Soana (), Laura Barbieri (), Andrea Lippi () and Simone Rossi ()
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Maria Gaia Soana: Department of Economics and Management, University of Parma, 43121 Parma, Italy
Andrea Lippi: Faculty of Economics and Law, Università Cattolica del Sacro Cuore, 29122 Piacenza, Italy
Simone Rossi: Faculty of Economics and Law, Università Cattolica del Sacro Cuore, 29122 Piacenza, Italy

Sustainability, 2021, vol. 13, issue 4, 1-15

Abstract: The wide-ranging academic literature on corporate governance in the banking sector includes only a few studies on bank ownership and, specifically, on the comparative power of shareholders within the corporate structure. This paper reports an investigation into the presence of multiple large shareholders and their influence on profitability and risk in the long-term, considering a sample of 697 U.S. and European listed commercial banks from 2008 to 2018. It was found that the number of large and institutional shareholders has a positive impact on profitability, but no effect on risk. However, long-term ownership by multiple large shareholders contributes to decreasing risk in banks.

Keywords: banks; corporate governance; multiple large shareholders; long-term ownership (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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