Foreign ownership in Australian firms

This paper constructs free float adjusted foreign ownership measure for Australian firms over the period 2001–2009 and explores the determinants of foreign ownership. Foreigners prefer investing in large Australian firms, value firms with high book to market ratios, firms which are listed abroad and firms with domestic cross holdings. Foreign institutions are found to have significant holdings in Australian firms. Results are robust to various econometric estimation techniques.

Graphical abstractFigure optionsDownload full-size imageDownload as PowerPoint slideHighlights► Paper constructs free float adjusted foreign ownership measure for Australian firms over the period 2001–2009. ► Foreigners prefer investing in large Australian firms and value firms with high book to market ratios. ► Foreigners prefer investing in firms which are listed abroad and firms with domestic cross holdings. ► Foreign institutions significantly invest in Australian firms.