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- W1557466517 abstract "In this study we analyze how the price impact of trades and the bid-ask spread are related to foreign stock ownership using data from 21 emerging markets. We show that while the price impact of trades increases with the percentage of shares held by foreign investors, the bid-ask spread decreases with foreign ownership. We interpret these results as evidence that, although foreign investors increase adverse selection risks for liquidity providers, they bring net benefit to the market in terms of lower trading costs by increasing competition in the price discovery process. Both the price impact of trades and the bid-ask spread are smaller for companies in the common law countries, and the general increase in foreign ownership in emerging markets after the global financial crisis resulted in higher price impacts and lower spreads." @default.
- W1557466517 created "2016-06-24" @default.
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- W1557466517 date "2015-01-01" @default.
- W1557466517 modified "2023-09-23" @default.
- W1557466517 title "Foreign Ownership, Legal System, and Stock Market Liquidity" @default.
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- W1557466517 doi "https://doi.org/10.2139/ssrn.2563154" @default.
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