Whether foreign direct investment (FDI) inflows provide predictive information for stock market returns at the sectoral level remains insufficiently understood, particularly in emerging markets. This study examines the short-term predictive relationship between sectoral FDI inflows and stock market returns across major sectors of the Turkish equity market. Monthly data covering January 2010 to November 2025 were analysed for the banking, finance and insurance, services, manufacturing, industrial, and wholesale and retail sectors. Separate Vector Autoregression (VAR) models were specified for each sector, with Borsa İstanbul 100 (BIST 100) index returns and USD/TRY exchange-rate returns included as control variables to account for broad market and exchange-rate conditions. Lagged predictive relationships were assessed using Granger causality tests, while the dynamic responses of the variables to shocks were examined through impulse response analysis. Model adequacy was evaluated using standard diagnostic tests, and substantive interpretation was restricted to the banking and finance and insurance models that satisfied the required diagnostic criteria. No statistically significant Granger-predictive relationship was identified in either direction between sectoral FDI inflows and the corresponding sectoral stock market returns in either of these diagnostically adequate models. The impulse response results likewise provide limited evidence of a persistent or systematic transmission from sectoral FDI inflows to sectoral stock market returns. Overall, the findings suggest that sector-specific FDI inflows should not be regarded as a robust short-term predictor of sectoral equity returns in Türkiye over the sample period. The results also indicate that sectoral stock market dynamics may be driven more strongly by broader market conditions and other macro-financial factors than by contemporaneous changes in sector-specific FDI inflows.
Information asymmetry remains a fundamental constraint on the allocation of external finance, as the organisational capabilities and internal quality of firms cannot be fully observed by external financiers. Although managerial quality, human capital, innovation, digitalisation, relational networks and financial transparency have each been linked to financing outcomes, their interrelated nature has received considerably less attention. To address this gap, a unified theoretical framework is developed in which these observable organisational attributes are conceptualised as indicators of a latent construct, termed Organisational Quality (OQ). Drawing on information asymmetry theory and signalling theory, the framework is tested using longitudinal data from 2,017 Vietnamese manufacturing small and medium-sized enterprises (SMEs), comprising 6,051 firm-year observations from the SMEs Survey. OQ is operationalised as a reflective latent construct within a structural equation modelling (SEM) framework, through which its associations with access to external finance, productive investment and firm performance are examined. Strong empirical support is obtained for the proposed framework. Higher OQ is found to be positively associated with access to external finance, and this association is significantly stronger under conditions of greater information asymmetry. Access to external finance is, in turn, positively associated with productive investment, while productive investment is positively associated with firm performance. The mediation results further indicate that OQ is associated with firm performance through both direct and indirect pathways, with a sequential pathway operating through improved access to external finance and subsequent productive investment. These relationships remain stable across alternative measurement approaches, model specifications and measures of firm performance. The findings provide three principal contributions. First, organisational characteristics that have traditionally been examined separately are integrated into a common latent organisational dimension. Second, OQ is operationalised and empirically validated as a reflective latent construct within an integrated SEM framework. Third, evidence is provided that OQ is associated with improved access to external finance, greater productive investment and enhanced firm performance, while its financing-related association becomes more pronounced as information asymmetry increases.
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