| Summary: | 碩士 === 國立高雄第一科技大學 === 金融研究所 === 104 === There is a large body of research argues that when less firm-specific information is publicly available, individual stock returns follow the broad market more closely, resulting in higher stock price synchronicity with the market. Using a sample of financial holding companies (FHCs) listed on the Taiwan Stock Exchange over 2003–2014, this paper investigates the effects of share holdings of foreign institutional investors and trading activity by foreign institutional investors on the amount of firm-specific information is incorporated into stock prices, as measured by stock price synchronicity. The result shows that ownership of foreign institutional investors and trading by foreign institutional investors are inversely associated with stock price synchronicity. In general, foreign institutional ownership and trading by foreign institution decreases stock price synchronicity to a greater extent than those of domestic institutional investors. Finally, we provide evidence suggesting that foreign trust fund does not play a more important role in incorporating firm-specific information into stock prices via their shareholdings, compared with other foreign investing institutions, such as financial institutions and juridical persons, which have strong incentive to monitor and improve information environment due to their large long investment horizons。
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