发表期刊：Journal of Banking & Finance
发表时间：October 2023
作者及单位：Xiaoran Ni*1，David Yin
1.Department of Finance, School of Economics & Wang Yanan Institute for Studies in Economics (WISE), Xiamen University, Fujian 361005, China
摘要：This study examines the effect of institutional common ownership on a firm's cost of equity capital. Recent literature on common ownership yields opposing predictions: increased strategic alliance in the product market could increase the non-diversifiable covariance risk of a firm's cash flows with other firms, leading to a higher cost of equity capital. However, reduced product market risk that is in part non-diversifiable could lead to a lower cost of equity capital. In both baseline and difference-in-differences settings, we document a negative and significant relation between common ownership and the cost of equity capital. We also provide direct evidence that common ownership reduces product market predation risk, distress risk, and overall risk while increasing stock liquidity. We do not find sufficient evidence that improved corporate governance drives the main findings. Overall, our findings indicate that institutional common ownership offers benefits to individual firms by reducing the cost of equity financing.
关键词：Common ownership; Cost of equity capital; Product market; Firm risk
