Foreign institutional investors, information asymmetries, and asset valuation in emerging markets

This study investigates the effects of information asymmetries and asset valuation model differences (investor heterogeneity) between foreign domestic investors on their distinct portfolio holdings in an emerging market setting. I argue that asymmetry investor heterogeneity views significantly interact explaining different allocation decisions investors. Employing a large dataset from Turkey, findings suggest both view play key role investment groups. Specifically, investors, are more likely to invest firms with higher global performance which supports view. However, this relationship only holds for high asymmetries. The difference models converge when asymmetric problems these groups weaken. contributes international finance literature by providing new explanation why assets.