How does foreign ownership affect beta estimation precision?

doi:10.1080/13504851.2026.2641137

How does foreign ownership affect beta estimation precision?

2026-03-01

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DOI：10.1080/13504851.2026.2641137

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Abstract

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This article investigates the impact of foreign ownership on the beta estimation precision and explores the underlying mechanisms using data from Chinese A-share listed firms. The results show that foreign ownership significantly improves the accuracy of beta estimates. Mechanism analysis reveals that foreign ownership influences beta precision through two main channels: enhancing stock pricing efficiency and mitigating institutional herding. This study sheds light on the micro-level mechanisms through which foreign ownership improves the quality of risk pricing in capital markets.

Keywords:

foreign ownership

beta estimation precision

pricing efficiency

institutional herding

How does foreign ownership affect beta estimation precision?

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