Impact of foreign ownership on stock return volatility of financial firms in Vietnam
Trinh Viet Pham Le
Banking Academy of Vietnam, Vega Holidays Joint Stock Company
Hang Thi Ngo
Banking Academy of Vietnam, Hanoi, Vietnam
DOI: https://doi.org/10.59429/ff.v2i1.6312
Keywords: foreign ownership; stock return; volatility; financial firms; Vietnam
Abstract
The paper investigates the impact of foreign ownership on the stock return volatility of financial firms in Vietnam. Applying panel regression models on a year-end research sample of 23 banks and financial firms listed on stock exchanges in Vietnam from 2017 to 2022, the study assures the negative relationship between foreign ownership and the stock return volatility, implying that increasing foreign ownership reduces the volatility of stock returns of financial firms. Our study’s novelty is reflected in following aspects. First, our study, examining about the foreign ownership's impact on stock returns’ volatility in emerging stock market conditions, will enrich this research field by contributing additional empirical evidence to the field through a concrete and well-designed research. Additonally, our research findings not only provide useful information about the volatility of those influential shares in mentioned industries coupled with its determinants but also support investors and policymakers in making investment decisions informedly as well as reviewing suitable regulations for investors and capitals from foreign countries, which is a critical aspect in helping Vietnam's stock market to expand more steadily and sustainably.
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