Abstract
Company’s risk-taking behavior has a significant impact on corporate earnings’ growth and the social economic development, and different ownership structure will affect the company’s risk preference. In this paper, with the 25 Chinese listed banks, the empirical tests the effect of ownership structure on bank’s risk preference. The result showed that the correlation between ownership concentration and the bank’s risk preference is positive; the bank’s risk preference and shareholding separation have inverted u-shaped relation; the correlation between bank’s equity balance and the bank’s risk preference is negative; the correlation between bank’s cash flow rights and voting rights divergence and the bank’s risk preference is in inverted u-shaped.
Highlights
From a broad perspective, risk preference refers to the amount of risk that an enterprise is willing to accept in the process of achieving its objectives
Until recently, scholars began to study the relationship between ownership structure and company risk preference
We use the rate of Risk-weighted Assets (RWA), which widely used in previous studies
Summary
Risk preference refers to the amount of risk that an enterprise is willing to accept in the process of achieving its objectives. [1] believed that the company’s risk bearing or risk-taking has improved corporate earnings’ growth and promoted economic development. As the important content of corporate governance, many scholars studied the relationship between ownership structure and the corporate performance. Until recently, scholars began to study the relationship between ownership structure and company risk preference. Low [2]’s research showed as the basic driving force on improving corporate performance and growth ability, risk-taking is very important to the company’s business and development. The last part is conclusions, the empirical conclusions are summarized, the limitation of this research and further research are showed in this part
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