Foreign ownership, bank information environments, and the international mobility of corporate governance

Fang, Yiwei, Hasan, Iftekhar, Leung, Woon Sau ORCID: https://orcid.org/0000-0002-0389-2126 and Wang, Qingwei ORCID: https://orcid.org/0000-0002-3695-7846 2019. Foreign ownership, bank information environments, and the international mobility of corporate governance. Journal of International Business Studies 50 (9) , pp. 1566-1593. 10.1057/s41267-019-00240-w

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Abstract

This paper investigates how foreign ownership shapes bank information environments. Using a sample of listed banks from 60 countries over 1997–2012, we show that foreign ownership is significantly associated with greater (lower) informativeness (synchronicity) in bank stock prices. We also find that stock returns of foreign-owned banks reflect more information about future earnings. In addition, the positive association between price informativeness and foreign ownership is stronger for foreign-owned banks in countries with stronger governance, stronger banking supervision, and lower monitoring costs. Overall, our evidence suggests that foreign ownership reduces bank opacity by exporting governance, yielding important implications for regulators and governments.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Palgrave Macmillan
ISSN:	0047-2506
Date of First Compliant Deposit:	8 April 2019
Date of Acceptance:	2 April 2019
Last Modified:	23 Nov 2024 15:00
URI:	https://orca.cardiff.ac.uk/id/eprint/121403

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