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Article

Do banks matter for the risk of a firm's investment portfolio? Evidence from foreign direct investment programs

Strategic Management Journal. 2015. Vol. 36. No. 8. P. 1264-1276.
Betschinger M.

The study explores the role of banks as debt and equity holders for the riskiness of a firm's investment strategy using a panel of Japanese firms in the electronics industry in the period 1992–2004 for the empirical analysis. Based on a conceptual framework grounded in agency and financial intermediation theories, we find that a larger involvement of banks as debt holders in a firm is associated with lower foreign direct investment portfolio risk, while the shareholdings of universal banks increase it, supporting the theoretical predictions.