해외 기관투자자 지분율과 자기자본비용

[Purpose]This study analyzes the relationship between foreign institutional investors’ ownership in domestic investee companies and the cost of equity capital. And the study investigated whether independent and professional monitoring of foreign institutional investors is related to the reliability of the financial statements of the investee company. [Methodology]The study used a sample of 2,246 company－year listed companies from 2011 to 2020 after the adoption of the Korean International Financial Reporting Standards. The independent variable is the indicator variable when foreign institutional investor’s ownership ratio is 5% or more, and the dependent variable is the arithmetic mean of the cost of equity capital according to the research model of Claus and Thomas (2001), Ohlson and Juettner (2005), and Easton (2004). [Findings]We found a significant negative relationship between the case where foreign institutional investor’s ownership ratio is 5% or more and the cost of equity capital of the investee corporation. These results indicate that the more foreign institutional investors that are independent of management and have excellent information collection and analysis capabilities exist, the more effectively they perform the monitoring function, which is related to the reduction of the information asymmetry level of the investee company. In addition, the negative correlation between the two variables is prominent in companies with small financial analysts following, suggesting that efforts to overcome the information disadvantage of foreign institutional investors are made more actively when the information environment is poor. [Implications]This study has a contribution to present the monitoring effects of foreign institutional investors by using the data on the ownership ratio of foreign institutional investors based in Korea, which has not been relatively actively researched.