Does foreign institutional ownership matter for stock price synchronicity? International evidence

IF 2.9 3区经济学 Q2 BUSINESS, FINANCE

Journal of Multinational Financial Management Pub Date : 2023-03-01 DOI:10.1016/j.mulfin.2023.100783

Tung Lam Dang , Thi Thuy Anh Vo , Xuan Vinh Vo , Linh Thi My Nguyen

{"title":"Does foreign institutional ownership matter for stock price synchronicity? International evidence","authors":"Tung Lam Dang , Thi Thuy Anh Vo , Xuan Vinh Vo , Linh Thi My Nguyen","doi":"10.1016/j.mulfin.2023.100783","DOIUrl":null,"url":null,"abstract":"<div><p>We investigate the relation between foreign institutional ownership and stock price synchronicity, and whether this relation varies across country-level institutional and information infrastructures. Using a comprehensive dataset for firms across 40 countries over the period between 2000 and 2016, we document the following notable findings. First, foreign institutional ownership is negatively associated with stock price synchronicity. Second, we find that improved information transparency is a possible channel underlying the effect of foreign institutional ownership on stock price synchronicity. In addition, the synchronicity-reducing effect of foreign institutional ownership is more pronounced for firms in countries with weaker institutional infrastructures. Finally, our results reveal different impacts of foreign institutional ownership on stock price synchronicity across various types of foreign institutional ownership, highlighting the importance of foreign investor heterogeneity in improving firm information environment.</p></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"67 ","pages":"Article 100783"},"PeriodicalIF":2.9000,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Multinational Financial Management","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1042444X23000026","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 2

Abstract

We investigate the relation between foreign institutional ownership and stock price synchronicity, and whether this relation varies across country-level institutional and information infrastructures. Using a comprehensive dataset for firms across 40 countries over the period between 2000 and 2016, we document the following notable findings. First, foreign institutional ownership is negatively associated with stock price synchronicity. Second, we find that improved information transparency is a possible channel underlying the effect of foreign institutional ownership on stock price synchronicity. In addition, the synchronicity-reducing effect of foreign institutional ownership is more pronounced for firms in countries with weaker institutional infrastructures. Finally, our results reveal different impacts of foreign institutional ownership on stock price synchronicity across various types of foreign institutional ownership, highlighting the importance of foreign investor heterogeneity in improving firm information environment.

查看原文本刊更多论文

外资机构所有权对股价同步性有影响吗？国际证据

我们研究了外资机构所有权与股价同步性之间的关系，以及这种关系是否在国家层面的机构和信息基础设施中有所不同。使用2000年至2016年期间40个国家的公司的综合数据集，我们记录了以下值得注意的发现。首先，外资机构持股与股价同步性呈负相关。第二，我们发现提高信息透明度可能是外资机构持股影响股价同步性的一个潜在渠道。此外，在制度基础设施较弱的国家，外国机构所有权的同步性降低效应更为明显。最后，我们的研究结果揭示了不同类型外资机构持股对股价同步性的不同影响，突出了外资投资者异质性对改善企业信息环境的重要性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Journal of Multinational Financial Management BUSINESS, FINANCE-

CiteScore

7.30

自引率

4.80%

发文量

审稿时长

30 days

期刊介绍： International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations have become increasingly multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have developed policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available. The purpose of the Journal of Multinational Financial Management is to publish rigorous, original articles dealing with the management of the multinational enterprise. Theoretical, conceptual, and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • Foreign exchange risk management • International capital budgeting • Forecasting exchange rates • Foreign direct investment • Hedging strategies • Cost of capital • Managing transaction exposure • Political risk assessment • International working capital management • International financial planning • International tax management • International diversification • Transfer pricing strategies • International liability management • International mergers.