FOREIGN OWNERSHIP AND STOCK PRICE SYNCHRONICITY: EVIDENCE FROM TURKEY

Year 2016, , 49 - 57, 01.06.2016

Oktay Tas Selin Duz Tan

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

Abstract

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

Keywords

Stock price synchronicity, foreign ownership, foreign shareholders

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