The impact of business group affiliation on stock price informativeness: Evidence from an emerging market

Keywords

business groups; emerging markets; information content; synchronicity; Turkey

Abstract

This paper examines the relationship between business group affiliation and stock price informativeness in an emerging market setting. We use stock price synchronicity as a measure, and study the impact of group affiliation -specifically the extent of affiliation, ownership structure and existence of group bank- on firm specific information content. Results reveal that the amount of firm-specific information capitalized into stock prices tends to be lower (higher) when the firm is group-affiliated (unaffiliated), indirectly (directly) owned, and affiliated group has (does not have) a group bank. Additionally, the extent of group affiliation maintains a non-linear relationship with synchronicity, suggesting that the perception of higher versus lower levels of group ownership differs.

Publication Date

5-1-2019

Publication Title

Financial Markets, Institutions and Instruments

Volume

28

Issue

2

Number of Pages

187-212

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1111/fmii.12111

Socpus ID

85062492011 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/85062492011

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