FOREIGN OWNERSHIP AND STOCK PRICE SYNCHRONICITY: EVIDENCE FROM TURKEY

Yıl 2016, Cilt: 2 Sayı: 1, 49 - 57, 01.06.2016

Oktay Tas Selin Duz Tan

https://doi.org/10.17261/Pressacademia.2016118627

Öz

This study investigates the impact of foreign ownership structure on the flow of firm specific information to stock prices in Turkey. This paper will be first to examine the relationship between ownership and stock price synchronicity in Turkey. We examine the effects of foreign ownership on the amount of firm specific information incorporated into share prices, as measured by stock price synchronicity, for listed firms in Borsa Istanbul 100 Index over the 2009–2014 period. We support the view that the R squared value in one of the emerging stock markets, Turkey is relatively high. We hypothesize and show that stock price synchronicity is lower for firms which have more foreign ownership ratios. That supports more firm specific information is incorporated into stock prices as the ratio of foreign ownership increases

Anahtar Kelimeler

Stock price synchronicity, foreign ownership, foreign shareholders

Kaynakça

• Agung, I. G. N. 2013,” Panel Data Analysis Using EViews”, Wiley: pp. 123–135.
• Aksu, M., Kosedag, A. 2006, “Transparency and Disclosure Scores and Their Determinants in the Istanbul Stock Exchange”, Corporate
• Governance: An International Review, vol. 14, no. 4, pp. 277-296. Central Bank of the Republic of Turkey, December 2014, “International Investment Position Report”.
• Chan, K., Hameed, A. 2006, “Stock Price Synchronicity and Analyst Coverage in Emerging Markets”, Journal of Financial Economics, vol. 80, no.1, pp. 115-147.
• Dasgupta, S., Gan, J., Gao, N. 2010, “Transparency, Price Informativeness, and Stock Return Synchronicity: Theory and Evidence”, Journal of
• Financial and Quantitative Analysis, vol. 45, no. 5, pp. 1189–1220.
• Demirag, I., Serter, M. 2003, “Ownership Patterns and Control in Turkish Listed Companies”, Corporate Governance: An International Review, vol. 11, no. 1, pp. 40-51.
• Farooq, O., Ahmed, S. 2014, “Stock Price Synchronicity and Corporate Governance Mechanisms: Evidence from an Emerging Market”,
• International Journal of Accounting, Auditing and Performance Evaluation, vol. 10, no. 4, pp. 395-409. Feng, X., Hu, N., Johansson, A. 2015, “Ownership, Analyst Coverage, and Stock Synchronicity in China”, Stockholm China Economic Research
• Institute, Stockholm School of Economics, no. 2015-36.
• Gul, F. A., Kim, J. B., Qiu, A. A. 2010, “Ownership Concentration, Foreign Shareholding, Audit Quality, and Stock Price Synchronicity:
• Evidence from China”, Journal of Financial Economics, vol. 95, no. 3, pp. 425-442. Gürsoy, G., Aydoğan, K. 2002, “Equity Ownership Structure, Risk Taking, and Performance: An Empirical Investigation in Turkish Listed
• Companies”, Emerging Markets Finance & Trade, 6-25. Hasan, I., Song, L., Wachtel, P. 2014, “Institutional Development and Stock Price Synchronicity: Evidence from China”, Journal of
• Comparative Economics, vol. 42, no. 1, pp. 92-108. He, W., Li, D., Shen, J., Zhang, B. 2013, “Large Foreign Ownership and Stock Price Informativeness Around the World”, Journal of
• International Money and Finance, vol. 36, pp. 211-230. Jensen, M. C., Meckling, W. H. 1976, “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure”, Journal of
• Financial Economics, vol. 3, no. 4, pp. 305-360. Jin, L., Myers, S. C. 2006, “R 2 Around the World: New Theory and New Tests”, Journal of Financial Economics, vol. 79, no. 2, pp. 257-292.
• Kho, B. C., Stulz, R. M., Warnock, F. E. 2009, “Financial Globalization, Governance, and the Evolution of the Home Bias”, Journal of
• Accounting Research, vol. 47, no. 2, pp. 597-635. Morck, R., Yeung, B., Yu, W. 2000, “The Information Content of Stock Markets: Why do Emerging Markets Have Synchronous Stock Price
• Movements?”, Journal of Financial Economics, vol. 58, no.1, pp. 215-260. Ntow-Gyamfi, M., Bokpin, G. A., Gemegah, A. 2015, “Corporate Governance and Transparency: Evidence from Stock Return Synchronicity”,
• Journal of Financial Economic Policy, vol. 7, no. 2, pp. 157-179. Piotroski, J. D., Roulstone, D. T. 2004, “The Influence of Analysts, Institutional Investors, and Insiders on the Incorporation of Market,
• Industry, and Firm-specific Information into Stock Prices”, The Accounting Review, vol. 79, no. 4, pp. 1119-1151.
• Roll, R. 1988, “R2”, Journal of Finance 25, pp. 545–566.