Bolak M., SÜER BAKLACI Ö. , Diyarbakirlioglu E.

5th Annual EuroMed Conference of the EuroMed Academy of Business, Montreuil, France, 4 - 05 October 2012, pp.167-181 identifier

  • Publication Type: Conference Paper / Full Text
  • City: Montreuil
  • Country: France
  • Page Numbers: pp.167-181


We examine the foreign ownership patterns in local stocks in an emerging capital market, i.e. the Istanbul Stock Exchange (ISE), to derive insights into the linkage between foreign investors' equity-level preferences and the information provided by the corresponding firm's financial statements. Our data consists of foreign ownership share in non-financial stocks over the period 2004 - 2008, during which foreign investors held on average 61% of the free-float equity in the ISE. Our analyses suggest that foreign investors are more likely to hold shares in firms with larger market capitalization and those with low leverage and book-to-market ratios. Overall, the results provide suggestive evidence on the asymmetric information hypothesis between local and non-local investors and, accordingly, useful insights into the equity home bias puzzle.