Yildiz, Y. (2021) Foreign institutional investors, information asymmetries, and asset valuation in emerging markets. Research in International Business and Finance, 56 . Article Number 101381. ISSN 0275-5319. (doi:10.1016/j.ribaf.2021.101381) (KAR id:100051)
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Official URL: https://dx.doi.org/10.1016/j.ribaf.2021.101381 |
Abstract
This study investigates the effects of information asymmetries and asset valuation model differences (investor heterogeneity) between foreign and domestic investors on their distinct portfolio holdings in an emerging market setting. I argue that information asymmetry and investor heterogeneity views significantly interact in explaining the different asset allocation decisions of foreign and domestic investors. Employing a large dataset from Turkey, the findings suggest that both information asymmetry and investor heterogeneity view play a key role in explaining the investment decisions of different investor groups. Specifically, different from domestic investors, foreign investors are more likely to invest in firms with a higher global market performance which supports the investor heterogeneity view. However, this relationship only holds for firms with high information asymmetries. The difference in valuation models between foreign and domestic investors converge when asymmetric information problems between these investor groups weaken. This study contributes to the international finance literature by providing a new explanation of why foreign and domestic investors invest in different assets.
Item Type: | Article |
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DOI/Identification number: | 10.1016/j.ribaf.2021.101381 |
Uncontrolled keywords: | Foreign institutional investors; Information asymmetries; IFRS adoption; Foreign directors; Emerging markets |
Subjects: | H Social Sciences |
Divisions: | Divisions > Kent Business School - Division > Department of Accounting and Finance |
Funders: | University of Huddersfield (https://ror.org/05t1h8f27) |
Depositing User: | Yilmaz Yildiz |
Date Deposited: | 17 Feb 2023 11:48 UTC |
Last Modified: | 01 Mar 2024 14:45 UTC |
Resource URI: | https://kar.kent.ac.uk/id/eprint/100051 (The current URI for this page, for reference purposes) |
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