Ownership structure and risk taking : Comparative evidence from private and state-controlled banks in China

@inproceedings{Dong2014OwnershipSA,
  title={Ownership structure and risk taking : Comparative evidence from private and state-controlled banks in China},
  author={Yizhe Dong and Chao Meng and Michael Firth and Wenxuan Hou},
  year={2014}
}
This study examines the impact of ownership structure on Chinese banks’ risk-taking behaviours. We classify Chinese commercial banks into three categories based on the different types of controlling shareholder, and find that banks controlled by the government (GCBs) tend to take more risk than those controlled by state-owned enterprises (SOECBs) or private investors (PCBs). This can be attributed to severe political intervention and weak incentives to follow prudent bank management practices… CONTINUE READING

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