Bank ownership concentration and stock price informativeness: International evidence

Abstract

This paper examines the relation between ownership concentration and stock price informativeness around the world. Using a sample of banks from 59 countries between 2002 and 2019, we find robust evidence from a linear model supporting the entrenchment effect. However, the nonlinear model shows that the effect of control rights on the informativeness of stock prices forms a U-shaped curve. We also document that banks with controlling shareholders have more volatility in the information content of bank stock prices in a poor regulatory environment or developing countries