The impact of business group affiliation on stock price informativeness: Evidence from an emerging market. Issue 2 (5th March 2019)

• Record Type: Journal Article
• Authors: Küllü, A. Melih; Dyer, Doug; Yilmaz, Gokhan; Sharma, Zenu
• Other Names: Chatziantoniou Ioannis guestEditor.; Hasan Iftekhar guestEditor.; Pasiouras Fotios guestEditor.
• Is Part Of: Financial markets, institutions and instruments. Volume 28:Issue 2(2019)
• Page Start: 187
• Page End: 212
• Publication Date: 2019-03-05
• Subjects: business groups -- emerging markets -- information content -- synchronicity -- Turkey -- G14 -- G15 -- G20 -- G34; Financial services industry -- Periodicals; Securities industry -- Periodicals; Financial instruments -- Periodicals; Financial institutions -- Periodicals; 332.105
• DOI: 10.1111/fmii.12111
• Languages: English
• ISSNs: 0963-8008

Abstract

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.