Asia-Pacific Financial Markets

, Volume 25, Issue 4, pp 267–284 | Cite as

The Effects of Firm-Level Investability Sizes on Foreign Ownership in Indonesian Public Firms

  • Dezie L. WarganegaraEmail author


This study investigates whether foreign investors investing in Indonesian public firms are basing their holdings on investability size, given other firms’ attributes such as dividend, liquidity, leverage, profitability, firm size, growth opportunity, and inter-industry factors. The analysis on this study is conducted using multiple regression analysis on the data that consists of free-float foreign ownership share in non-financial companies listed in the Indonesia Stock Exchange over the period 2014–2015. It is found that foreigners prefer holding stocks in larger investability and firm sizes, higher dividends, and the consumer goods industry sector. Aside from well-established firm-specific determinants of the degree of foreign ownerships in the literature that foreigner invest more in shares of large firms in a particular industry sector with higher dividends, this study also provides evidence that foreign investors require widely available shares for their investment in a foreign country. Understanding the determinants of foreign investors’ preferences may provide valuable insights for policy makers and Indonesian firms in attempts to attract foreign investment to the stock market.


Foreign ownership Investability size Indonesia Stock Exchange Free-float share 

JEL Classification

G11 G15 


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Copyright information

© Springer Japan KK, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Finance Program, Accounting Department, Faculty of Economics and CommunicationBina Nusantara UniversityJakartaIndonesia

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