The Relationship between Institutional Ownership and Firm Return Volatility

• Main Authors: Peng, Yi-Tzu, 彭怡姿
• Other Authors: Chiu, Li-Ching
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/35933513618608839571

碩士 === 銘傳大學 === 財務金融學系碩士班 === 105 === The purpose of this study is to explore the association between institutional ownership and firm return volatility. Taiwan's stock market as the main emerging countries, emerging markets have a high rate of return, the characteristics of large risk fluctuations. For emerging markets, we didn’t reach a consensus whether foreign institutional ownership is conducive to the local stock market and economic development. Supporters believe that the introduction of foreign capital into the domestic economy can bring capital, reduce transaction costs and risks. Opponents argue that in the case of immature financial institutions and regulators, foreign institutional ownership makes domestic stock markets face international risks, leading to fragility in the domestic market. In addition, most of the emerging market enterprises have one or more control companies with leading decision-making. Leading to the face of overseas investment, the factors considered and mature enterprises are different. Controlling shareholders may be based on their own interests, resulting in agency problems. This study shows that institutional ownership and firm return volatility is negative relationship. There is a negative relationship between foreign institutional ownership and firm return volatility. There is no significant correlation between the company's core agent problem and firm return volatility.