摘要：We examine the impact of institutional investor cross holding (IICH) on the cost of equity. The findings suggest that IICH firms have a lower cost of equity than non-IICH firms. We find that it is mainly IICH firms in the same industry that successfully reduce their cost of equity. Additional results indicate that IICH investors are more successful at reducing idiosyncratic risk and informational risk and can improve firm performance and governance when they cross hold firms in the same industry. We also find that IICHs with longer tenure, higher competition, and greater analyst following are more successful at reducing the cost of equity.
