This study looks into how political proximity affects US institutional ownership in ADR firms. I find strong empirical evidence that when bilateral political relation between a country and US is bad, the level of US institutional ownership and the number of institutional investors are low for ADR firms from that country. This paper also discusses a possible channel through which political proximity may affect US institutional investors - country’s popularity among American. Consistent with previous literatures, I find that US institutional investors have positive impact on firm value. Further, I also find that firms with large US institutional ownership are less likely to face class action lawsuits and disseminate more voluntary disclosure news – press release. I conclude the paper with results showing that if the country or the country’s region is involved in a crisis or crises, US institutional investors refrain from putting money into ADR firms from those countries or regions.
JEL Classification: G15; G24; G32
Keywords: Foreign Institutional Ownership; Political Proximity
학회소식
[2016년 제 4차] Political Relations and US Institutional Ownership
작성자 : 관리자
조회수 : 907
게시일 :
2016-12-21
