Attracting institutional investments to emerging markets: the case of Turkiye

Avcı, Süreyya Burcu (2023) Attracting institutional investments to emerging markets: the case of Turkiye. International Journal of Finance and Economics . ISSN 1076-9307 (Print) 1099-1158 (Online) Published Online First

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Understanding institutional investors' investment criteria in emerging markets is essential because they typically make large investments without control rights or protection of the rule of law. This study undertakes an investment criteria investigation of institutional investors in Turkiye. The sample covers real and financial sector companies to investigate sectoral differences in Borsa Istanbul-listed firms for 2010–2021. Using a panel data approach, we show that the presence of growth options, generous payout policy, attractive firm valuation, and quality of the external governance mechanisms are important factors in attracting institutional investors by real sector firms. Only a large firm size and the quality of the external governance mechanisms arise as important factors for financial sector firms. Moreover, institutional holdings positively impact the percentage shares of institutional investors during crisis periods among real sector firms, whereas they do not affect financial sector firms. Real-sector and financial-sector firms can use our findings to increase institutional ownership. Our results have important implications for institutional investors, individual investors, and market regulators to demand critical corporate governance practices.
Item Type: Article
Uncontrolled Keywords: dividend policy; emerging markets; growth options; institutional block; institutional investor; internal governance mechanisms; market timing
Divisions: Sabancı Business School
Depositing User: Süreyya Burcu Avcı
Date Deposited: 05 Feb 2024 21:32
Last Modified: 05 Feb 2024 21:32

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