Are Foreign Ownership and Good Institutions Substitutes? The Case of Non-Traded Equity

Harry Huizinga and Cécile Denis

No 4339, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: High domestic shareholder concentration for publicly-traded firms is a common mechanism to mitigate minority shareholder expropriation in environments of poor investor protection. This offers an explanation of the home bias in share portfolios. An alternative mechanism, common in the case of non-traded firms, is to have a controlling foreign shareholder that may be subject to high international standards of investor protection. This Paper presents a model explaining a high foreign ownership share of non-traded equity in countries with poor investor protection. Empirical evidence supports the hypothesis that foreign ownership of non-traded equity is higher in countries with poor investor protection.

Keywords: Foreign ownership; Shareholder protection; Non-traded equity (search for similar items in EconPapers)
JEL-codes: F36 G32 (search for similar items in EconPapers)
Date: 2004-04
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://cepr.org/publications/DP4339 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:4339

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP4339

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().