Galeotti, Andrea and Ghiglino, Christian (2021) Cross-ownership and portfolio choice. Journal of Economic Theory, 192. p. 105194. DOI https://doi.org/10.1016/j.jet.2021.105194
Galeotti, Andrea and Ghiglino, Christian (2021) Cross-ownership and portfolio choice. Journal of Economic Theory, 192. p. 105194. DOI https://doi.org/10.1016/j.jet.2021.105194
Galeotti, Andrea and Ghiglino, Christian (2021) Cross-ownership and portfolio choice. Journal of Economic Theory, 192. p. 105194. DOI https://doi.org/10.1016/j.jet.2021.105194
Abstract
Cross-ownership smooths firms' idiosyncratic shocks but affects their portfolio choice and, therefore, their risk-taking position. The classical intuition on the role of pooling risk in raising welfare is valid when ownership is evenly dispersed. However, when the ownership of some firms is concentrated in the hands of a few others, deeper integration leads to excessive risk-taking and volatility and, consequently, it results in lower aggregate welfare.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Financial networks; Separation between ownership and control; Bow-tie; Diversification; Concentration; Risk taking |
| Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
| SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
| Depositing User: | Unnamed user with email elements@essex.ac.uk |
| Date Deposited: | 01 Sep 2021 15:23 |
| Last Modified: | 16 Jan 2023 14:36 |
| URI: | http://repository.essex.ac.uk/id/eprint/31003 |
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