The Research on the Influence of Foreign Shareholding Ratio on Stock Return
DOI:
https://doi.org/10.6981/FEM.202602_7(2).0001Keywords:
Foreign Ownership Ratio; Stock Liquidity; Stock Return.Abstract
With the continuous improvement of the openness of China's capital market, the shareholding ratio of foreign capital in the A-share market has been rising steadily, and its impact mechanism on stock returns has become an important issue of concern in both academic and practical circles. Based on the data of Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect stocks from 2014 to 2023, this paper empirically studies the dynamic impact of foreign capital's shareholding ratio on A-share stock returns and its transmission path. The research finds that there is a significant negative correlation between foreign capital's shareholding ratio and stock returns; meanwhile, from the perspective of market reaction, the choice of stock liquidity in the transmission mechanism validates the rationality of this theory.
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