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The impact of business group affiliation on stock price informativeness: Evidence from an emerging market
Author(s) -
Küllü A. Melih,
Dyer Doug,
Yilmaz Gokhan,
Sharma Zenu
Publication year - 2019
Publication title -
financial markets, institutions and instruments
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.386
H-Index - 23
eISSN - 1468-0416
pISSN - 0963-8008
DOI - 10.1111/fmii.12111
Subject(s) - synchronicity , corporate group , stock price , stock (firearms) , business , stock market , monetary economics , perception , economics , finance , psychology , corporate governance , mechanical engineering , paleontology , horse , neuroscience , series (stratigraphy) , psychoanalysis , engineering , biology
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.