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

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  • Maria Gaia Soana

    (Department of Economics and Management, University of Parma, 43121 Parma, Italy)

  • Laura Barbieri

    (Faculty of Economics and Law, Università Cattolica del Sacro Cuore, 29122 Piacenza, 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)

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.

Suggested Citation

  • Maria Gaia Soana & Laura Barbieri & Andrea Lippi & Simone Rossi, 2021. "The Effect of Multiple Large Shareholders on Banks’ Profitability and Risk," Sustainability, MDPI, vol. 13(4), pages 1-15, February.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:4:p:1888-:d:496626
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