@article{ff8570319b344cacb9a951e9d2be16cc,
title = "Institutional investors{\textquoteright} horizons and bank transparency",
abstract = "We examine the relation between institutional investors{\textquoteright} horizons and bank transparency. The novelty of this research is to consider three important aspects of transparency: disclosure quality, private information gathering and auditor fees. We find strong evidence indicating that banks dominated by long-term (short-term [ST]) institutional shareholders exhibit higher (lower) levels of disclosure quality. However, there is no evidence that investor horizon has a differential effect on private information gathering and audit pricing. The study employs alternative proxies and estimations such as two-stage least squares and propensity score matching to address endogeneity. We also document that banks with higher ST institutional shareholding are associated with lower crash risk. These findings are particularly significant because poor bank transparency has been identified as a contributing factor to the 2007–2009 financial crisis.",
keywords = "auditor fees, crash risk, information asymmetry, institutional investors, investors{\textquoteright} horizons, load loss provision",
author = "Mamiza Haq and Shams Pathan and Mendez, {Carlos Fernandez} and Lobo, {Gerald J.}",
note = "Funding Information: We thank Andrew Stark (senior editor), an anonymous reviewer, Robert Durand, Kiridaran Kanagaretnam, Gopal Krishnan, Robert DeYoung, David Martinez‐Meira, Tom Cronje, James Vickery, Christa Bouwman, Bjorn Jorgensen, Ambrus Kecsk{\'e}s, Mostafa Hasan, Vladimir Volkov, Jing Tian, Aaron Gilbert, Jun Chen, Bart Frijns, Michael Skully, George Pennacchi, Darren Henry, Trent Seymour, Petko Kalev, Adam Clements, Phong Ngo, Kathy Walsh, Martien Lubberink, Victoria Clout, Brandon Cline (discussant at 2019 FMA Glasgow), Alison Parkes, Kamran Ahmed, Alireza Vafaei, Robert Bianchi and Reza Monem and seminar and conference participants at Griffith University, Auckland University of Technology, University of Tasmania, La Trobe University, Monash University, the 2019 New Zealand Finance Colloquium and the 2017 FIRN Banking and Financial Stability Meeting at Australian National University for helpful suggestions and comments. We thank Mo El‐Assaad, Jason Chao and Kelvin Saekow of FTSE‐Russell Investments for providing Russell indexes reconstitution data. For sharing their data, we are especially thankful to Brian Bushee for his investor classification data. We also thank Zhengling Xiong and Victor Maxwell for their excellent research assistance. Finally, Shams Pathan gratefully acknowledges the generous research support received from the Australian Research Council Discovery Early Career Research Award [ARC DECRA # DE140100253]. Carlos Fernandez Mendez also acknowledges the financial support from the Spanish Ministry of Science and Innovation via Project PID2022‐140940NB‐I00 and from the Government of the Principate of Asturias via Project AYUD/2021/50878. The usual disclaimers apply. Publisher Copyright: {\textcopyright} 2023 John Wiley & Sons Ltd.",
year = "2024",
month = may,
day = "1",
doi = "10.1111/jbfa.12749",
language = "English",
volume = "51",
pages = "1378--1407",
journal = "Journal of Business Finance and Accounting",
issn = "0306-686X",
publisher = "Wiley-Blackwell",
number = "5-6",
}