Risk-taking choices; Large shareholders; Portfolio diversification

Roberto Mura, Marchica Faccio

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 non-diversified 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 aimed at improving capital market development can improve economic welfare.
Original languageEnglish
Title of host publicationhost publication
Publication statusPublished - May 2010
EventSecond Paris Corporate Finance Conference, France - Paris, France
Duration: 27 May 201028 May 2010


ConferenceSecond Paris Corporate Finance Conference, France
CityParis, France


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