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@article{Kacperczyk:2021:rfs/hhaa076,
author = {Kacperczyk, M and Sundaresan, S and Wang, T},
doi = {rfs/hhaa076},
journal = {The Review of Financial Studies},
pages = {1317--1367},
title = {Do foreign institutional investors improve price efficiency?},
url = {http://dx.doi.org/10.1093/rfs/hhaa076},
volume = {34},
year = {2021}
}

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TY  - JOUR
AB  - We study the impact of foreign institutional investors on price efficiency withfirm-level international data. Using MSCI index inclusion and the U.S. Jobsand  Growth  Tax  Relief  Reconciliation  Act  as  exogenous  shocks  to  foreignownership,  we  show  that  greater  foreign  ownership  increases  stock  priceinformativeness, especially in developed economies. This increase arises fromnew  information  that  foreign  investors  bring  in,  and  displacement  of  lessinformed  domestic  retail  investors.  Finally,  we  show  that  foreign  ownership,particularly  from  active  investors,  increases  market  liquidity,  reduces  firms’cost of equity, and increases firms’ real investment growth.   (JELG11, G12,G14, G15)
AU  - Kacperczyk,M
AU  - Sundaresan,S
AU  - Wang,T
DO  - rfs/hhaa076
EP  - 1367
PY  - 2021///
SN  - 0893-9454
SP  - 1317
TI  - Do foreign institutional investors improve price efficiency?
T2  - The Review of Financial Studies
UR  - http://dx.doi.org/10.1093/rfs/hhaa076
UR  - https://academic.oup.com/rfs/advance-article/doi/10.1093/rfs/hhaa076/5866988
UR  - http://hdl.handle.net/10044/1/79556
VL  - 34
ER  -

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