Foreign ownership linkage is linkage between assets that are formed by investors. Two assets are foreign ownership linked if they are
held by at least one investors.

Foreign ownership linkage helps explaining international asset return co-movement in addiiton to traditional country and industry factors.
The linkage can also explain a mechanism through which international crisis contagion spreads.

By understanding the foreign ownership linkage, we can have better understanding of foreign capital movements, which in turn lead to better policy.