earticle

영어

Foreign investors are the second largest group in the Korean stock market in terms of stock holdings. This study tests whether the level of foreign ownership in a firm is inversely related to information asymmetry between the firm and the market. Using 399 samples of manufacturing firms listed on the Korea Stock Exchange during the period from 2000 to 2014, we analyze firm-specific factors that affect foreign ownership. After controlling for variables related with foreign equity ownership as reported in previous studies, the coefficients for systematic risk, unsystematic risk and managerial ownership exhibit a statistically significant negative sign. The result shows that foreign investors tend to hold stocks in low information asymmetry.