Cross-ownership and portfolio choice

Galeotti, Andrea; Ghiglino, Christian

doi:10.1016/j.jet.2021.105194

Cited by 9 publications

(4 citation statements)

References 32 publications

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“…This sort of externality is not new to the financial network setting: There are many settings in which the choice of investments might not reflect the interests of all those who are affected (Admati & Hellwig 2013), with an early illustration of this being offered by Jensen & Meckling (1976) in which a manager makes choices that do not reflect the shareholders' interests. This has been investigated in a variety of network settings (Brusco & Castiglionesi 2007, Hirshleifer & Teoh 2009, Galeotti & Ghiglino 2021, Jackson & Pernoud 2019, Shu 2019, where the externalities are wide and the interests extend well beyond those directly interacting with an institution.…”

Section: Inefficiently Risky Investmentsmentioning

confidence: 99%

Systemic Risk in Financial Networks: A Survey

Jackson

Pernoud

2021

Annu. Rev. Econ.

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We provide an overview of the relationship between financial networks and systemic risk. We present a taxonomy of different types of systemic risk, differentiating between direct externalities between financial organizations (e.g., defaults, correlated portfolios, fire sales), and perceptions and feedback effects (e.g., bank runs, credit freezes). We also discuss optimal regulation and bailouts, measurements of systemic risk and financial centrality, choices by banks regarding their portfolios and partnerships, and the changing nature of financial networks. Expected final online publication date for the Annual Review of Economics, Volume 13 is August 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

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Section: Inefficiently Risky Investmentsmentioning

confidence: 99%

Systemic Risk in Financial Networks: A Survey

Jackson

Pernoud

2021

Annu. Rev. Econ.

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“…This sort of externality is not new to the financial network setting: there are many settings in which the choice of investments might not reflect the interests of all those who are impacted (Admati & Hellwig (2013)), with an early illustration of this being made by Jensen & Meckling (1976) in which a manager makes choices that do not reflect shareholders' interests. This has been investigated in a variety of network settings (Brusco & Castiglionesi (2007); Hirshleifer & Teoh (2009); Galeotti & Ghiglino (2019); Jackson & Pernoud (2019); Shu (2019)), where the externalities are very wide and the interests extend well beyond those directly interacting with an institution.…”

Section: Investment Decisionsmentioning

confidence: 99%

Systemic Risk in Financial Networks: A Survey

Jackson

Pernoud

2020

SSRN Journal

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We provide an overview of the relationship between financial networks and systemic risk. We present a taxonomy of different types of systemic risk, differentiating between direct externalities between financial organizations (e.g., defaults, correlated portfolios and firesales), and perceptions and feedback effects (e.g., bank runs, credit freezes). We also discuss optimal regulation and bailouts, measurements of systemic risk and financial centrality, choices by banks' regarding their portfolios and partnerships, and the changing nature of financial networks.

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“…Alternatively, it could be multilateral, wherein multiple firms own each other's shares. Cross‐ownership can disperse business risks (Galeotti & Ghiglino, 2021), mitigate information asymmetry to a certain extent, and reduce the efficiency loss caused by vicious competition in the entire market. Cross‐ownership is widespread in the automotive, banking, media, and financial sectors (Bárcena‐Ruiz & Sagasta, 2021a; Dietzenbacher et al, 2000; Ono et al, 2004).…”

Section: Introductionmentioning

confidence: 99%

Unilateral cross‐ownership and emission‐reduction technology sharing in a duopoly

Chen,

Sun,

Liu

2023

Manage Decis Econ

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This study constructs a Cournot duopoly model that considers unilateral cross‐ownership and emission‐reduction technology sharing, compares the equilibrium results under different cases, explores the impacts of unilateral cross‐ownership and technology sharing, and analyzes the boundary conditions for realizing technology sharing. The results indicate that unilateral cross‐ownership has complex effects on the equilibrium results. Emission‐reduction technology plays a positive role in improving environmental and social welfare. Furthermore, the boundary conditions of technology sharing were found to be affected by the carbon tax, cost‐reduction effect of emission‐reduction technology, and cross‐ownership.

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Cross-ownership and portfolio choice

Cited by 9 publications

References 32 publications

Systemic Risk in Financial Networks: A Survey

Systemic Risk in Financial Networks: A Survey

Systemic Risk in Financial Networks: A Survey

Unilateral cross‐ownership and emission‐reduction technology sharing in a duopoly

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