The impact of financial institutions' cross-shareholdings on risk-taking

Abstract

The complex network associations formed by cross-shareholdings of financial institutions have affected the risk-taking of financial institutions, and have gained considerable attention in the realm of finance and corporate governance. This article uses 40 Chinese financial institutions listed on A-shares from 2012 to 2021 as data samples, using social network and panel regression to analyze the impact of cross-shareholdings of financial institutions on risk-taking. The research results show that: First, cross-shareholding intensity can reduce the risk-taking level of financial institutions. Second, the intensity of cross-shareholdings reduces the risk-taking level of financial institutions by increasing the level of diversified income. Third, securities companies have the best effect of reducing risk-taking levels through cross-shareholdings, followed by banks, and insurance institutions are relatively poor.