Do Common Shareholder Networks Reduce Bank Risk-taking?
Based on data from a sample of 92 commercial banks in China from 2017-2021,this paper examines the impact of common shareholder networks on bank risk-taking,using the common shareholder networks formed by banks through their top ten shareholders as the research lens.It is found that:first,the increase in the centrality of the common shareholder network can reduce bank risk-taking,and the higher the degree centrality,proximity centrality and eigenvector centrality,the more it can reduce bank risk-taking,and this result still holds significantly after multiple stability tests and endogeneity treatments.Second,the mechanism analysis shows that an increase in the network centrality of common shareholders can reduce bank risk-taking by exerting three channels:the information effect,the resource effect and the reputation effect.Third,the heterogeneity analysis finds that from the difference of marketization level,the lower the marketization level,the more significant the effect of network centrality enhancement on reducing bank risk taking;from the difference of economic policy uncertainty,the higher the economic policy uncertainty,the more significant the effect of network centrality enhancement on reducing bank risk taking.The research in this paper provides a new perspective of social networks for banks to reduce risk-taking,and also provides some reference for relevant departments to formulate the development strategy of banking system.
Common Shareholder NetworkSocial NetworkBank Risk-takingLevel of MarketizationEconomic Policy Uncertainty
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