Bank ownership and stock price informativeness. Does politics matter?

Anh-Tuan Doan and Kun-Li Lin

International Review of Financial Analysis, 2022, vol. 79, issue C

Abstract: This study investigates the effects of ownership on the informativeness of the stock prices of 636 commercial banks from 59 countries for 2002–2014. We find strong and robust evidence that state ownership is associated with stock prices having less information in developing countries. This result is consistent with the conjecture that state ownership is associated with a less transparent environment that discourages investors from trading on private information. Furthermore, we find that politics magnifies the effect of state ownership on the informativeness of stock prices during election years. In particular, we show that stock prices are less informative for state ownership in countries with civil law or parliamentary systems. These findings shows that the political channel plays an important role in determining the expropriation by government shareholders, especially in developing countries.

Keywords: State ownership; Stock price informativeness; Political (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521921003069
Full text for ScienceDirect subscribers only

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:eee:finana:v:79:y:2022:i:c:s1057521921003069

DOI: 10.1016/j.irfa.2021.101990

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().