Largest Shareholder Identity and Corporate Risk-Taking: Evidence from Swedish Listed Firms

Sammanfattning

Purpose: This study examines whether the identity of the largest shareholder is associated with differences in corporate risk-taking among Swedish listed firms, across operational risk and corporate financial policy. Methodology: The sample covers 272 Swedish listed firms over 2015-2024 (2,077 firm-year observations), with the largest shareholder classified into five categories. Physical owners serve as the baseline category, against which fund companies, pension funds, ownership spheres, and private equity firms are compared. Theoretical Perspectives: Ownership concentration, shareholder diversification, patient capital, Swedish corporate governance. Empirical Foundation: Ownership data from the Holdings database is combined with accounting and market data from Capital IQ Pro. Operational risk is measured as the standard deviation of industry-adjusted ROA over a five-year forward-looking window. Corporate financial policy is measured through leverage, cash holdings, and CAPEX. Conclusions: In this study, we find no robust association between owner identity and operational risk, consistent with the view that strong governance institutions constrain owner-specific influence on operating volatility. However, owner identity is associated with distinct financial policy choices. The most robust finding is that private equity ownership is associated with higher leverage across both OLS and propensity score matching. Other associations across owner types appear in OLS but attenuate under propensity score matching or alternative specifications. We suggest that this pattern reflects a combination of selection on observable firm characteristics and genuine ownership influence.