An Examination on the Investment Preferences of Foreign Investors

• Main Authors: Tung-Hsuan Tseng, 曾彤暄
• Other Authors: Yi-Hsing Liao
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/5dsx7f

碩士 === 中原大學 === 會計研究所 === 99 === The increasing deal proportion of foreign investment pushes Taiwan government and firms to actively draw foreign investors’ attention. However, quite a few institutional investors are limited or even forbidden to invest in speculative grade firms or hold non-investable grade firms. The complication and inaccessibility of firms' information causes information asymmetry problem between firms and the public. Investors should consider risk prior to profits. Credit risk rating therefore has important meaning to public investors. However, whether the rating plays an important role in the smart investor’s decision-making is an empirical question. This paper adopts panel data model and censored regression model to examine firms listed on the TSE and OTC from 1998 to 2009, because the data is cross-section and time series assembled and the foreign investment still has upper limitation in Taiwan security market till Dec 30, 2000. As the empirical results show, the higher a firm is graded, the more its shares are held in the portfolio of foreign investors. Namely, firms should be dedicated to upgrade their risk rating to attract the investments of foreign investors.