The relationship between foreign ownership and stock return volatility - Evidence in VietNam

Abstract

The study investigates the relationship between foreign ownership and stock return volatility in Vietnam. The data consists of 247 non financial firm listed on Ho Chi Minh Stock Exchange from 2011 to 2015. After testing and evaluating, the empirical results imply that an increase in foreign ownership in firms’ ownership structure relates to a decrease in stock return volatility. Besides employing foreign ownership and stock return volatility as main variables to examine, the study uses secondary data of firm size, leverage ratio, market to book ratio and turnover for controlling variables to perceive significant result. The extent of study provides informative findings and understanding of market and ownership structure for both investment strategies setting and government policies setting.