Abstract
This paper studies the stock ownership in Indian firms by Foreign Institutional Investors during 2013 to 2015. Several firm-level characteristics are used to measure the extent to which information asymmetry affects the level of FII ownership in these firms. The analysis reveals that the firm-size and the book-to-market ratio are significant variables in selecting the equity investments by this investor group. There is not much empirical support for beta or the export ratio as determinants of firm-level ownership. In their holdings of large-firm stocks, there is a strong evidence that FIIs prefer to hold more shares of high exports firms.
Highlights
The Governments of emerging market economies have taken measures to attract foreign direct investments and foreign portfolio investments to bridge the savings–investment gap and to finance the current account deficit
Several firm-level characteristics are used to measure the extent to which information asymmetry affects the level of Foreign Institutional Investors (FIIs) ownership in these firms
While the foreign investors continue to invest across countries to diversify the risk of their investment portfolio and to achieve higher returns, the host countries felt that foreign financial capital provide an impetus to economic growth and the domestic financial market development [1]-[3]
Summary
How to cite this paper: Hariprasad, B. (2016) FII Ownership in Indian Equity Securities: The Firm-Level Determinants. How to cite this paper: Hariprasad, B. (2016) FII Ownership in Indian Equity Securities: The Firm-Level Determinants. Received: July 16, 2016 Accepted: September 16, 2016 Published: September 19, 2016
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