دانلود رایگان مقاله انگلیسی سرمایه گذاران نهادی خارجی و هم حرکتی بازده سهام - اشپرینگر 2018

Abstract

We investigate whether foreign institutional investors facilitate firm-specific information flow in the global market. Specifically, using annual institutional ownership data from firms across 40 countries, we find that foreign institutional ownership is negatively associated with excess stock return comovement. Our results are more pronounced when foreign institutional investors originate from common-law countries and hold a large equity stake in invested firms; and when the invested firms are located in civil-law countries. Overall, the evidence suggests that foreign institutional investors from countries with strong investor protection play an important informational role in mitigating excess stock return comovement around the world.

Conclusion

This study examines whether foreign institutional investors affect firms’ information environment and mitigate excess stock return comovement. We find that foreign institutions, particularly those from countries with strong investor protection, play a more significant role than domestic institutions in incorporating firm-specific information into stock price, because such foreign institutions tend to have greater access to global private information and relatively superior information processing skills. We also find that high-stake foreign institutions contribute more to the reduction of excess stock return comovement, suggesting that the size of equity stake allows them to cope effectively with high fixed costs for producing firm-specific information. Using subsamples based on country-level investor protection, we further show that foreign institutions from countries with strong investor protection are the main drivers in reducing excess stock return comovement in countries with weak investor protection. Our results provide important policy implications. Given that foreign institutions from countries with strong investor protection matter more in facilitating firm-specific information flow in countries with weak investor protection, firms from emerging markets should attract foreign institutional investors, particularly those from countries with strong investor protection, to take large equity stakes in their firms. The finding that firm-level foreign institutional ownership mitigates the effect of weak investor protection at the country level suggests that reducing excess stock return comovement can be achieved with the help of foreign institutional investors.