Large shareholder diversification and corporate risk-taking

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review


Using new data for the universe of firms covered in Amadeus, we reconstruct the portfolios of shareholders who hold equity stakes in private- and publicly traded European firms. We find great heterogeneity in the degree of portfolio diversification across large shareholders. Exploiting this heterogeneity, we document that firms controlled by diversified large shareholders undertake riskier investments than firms controlled by nondiversified large shareholders. The impact of large shareholder diversification on corporate risk-taking is both economically and statistically significant. Our results have important implications at the policy level because they identify one channel through which policy changes can improve economic welfare. © The Author 2011. Published by Oxford University Press on behalf of The Society for Financial Studies.
Original languageEnglish
Title of host publicationReview of Financial Studies|Rev. Financ. Stud.
Number of pages40
Publication statusPublished - Nov 2011
EventWestern Finance Association (WFA) - Santa Fe, US
Duration: 1 Jan 1824 → …


ConferenceWestern Finance Association (WFA)
CitySanta Fe, US
Period1/01/24 → …


Dive into the research topics of 'Large shareholder diversification and corporate risk-taking'. Together they form a unique fingerprint.

Cite this