**5. Conclusion**

Floating capital ratio can affect the price of shares in two ways: first, a small quantity of shares can make a stock unattractive to investors, and second, a low floating capital in the market represents less amount of shares available to negotiate, which can cause inadequate liquidity [7]. These statements make it possible to conclude that a low floating capital ratio has the effect of reducing the value of shares due to insufficient demand from investors [11].

Different authors studied the effect of stock property concentration on stock return (7), others address the adverse change in market liquidity of stocks as a result of the decrease in free float (6), or the effect of the free float ratio (FFR) on stock return, risk, and trading activity (8).

This study documented the effects of floating capital ratio on price returns, price volatility and traded volume in Latin American capital markets. Data from 181 firms listed at the end of 2016 was used. These enterprises are part of the most representative indices of each market based on traded volume or market capitalization. Results obtained applying linear regressions methods show different situations in each country.

It is observed, for this temporary space and according to the sample requested, that in the case of Argentina, free float ratio is not statistically significant in the variation share prices. Volatility or the negotiated volume presents an inverse relationship with floating capital.

In the studies made for the countries of Peru and Colombia, we found that greater floating capital affects profitability in a positive way but only in Peru, it is possible to say that a greater floating capital affects volatility in stock prices. For the case of Chile and Brazil, it is not possible to obtain conclusions since results were not significant.

As a conclusion, these findings are compatible with the previous studies and prove that free float ratio does matter for the investors. Higher floating ratio implies higher market value for stocks for the cases of Peru and Colombia. Therefore, these results provide empirical evidence for the growing practice of weighting stocks according to free float ratio for the construction of indexes. They also support designing incentive measures to present to corporations and policy makers for enlarging floating ratios that will decrease cost of capital and ensure capital market development. Although the regression results of this study were robust and clear, it depends on 1-year data, which eliminates the free float variations within a stock. Therefore, examining effects of free float ratio for different sectors or for firms whose floating ratios change substantially within a time horizon may bring interesting results for further studies [11].

The study shows that there is no relationship between floating capital ratio and the traded volume for this temporary space and for the companies selected. It will be possible to repeat the same analysis next year and check whether these conclusions can be different or continue ratifying the current results.

Nevertheless, this study presents two limitations: the first is the use of data from a crosssectional sample, that is, it takes data corresponding to a set of companies for a moment in time, and the other limitation is that the selected companies are only those that make up the indexes, due to the availability of public information.

Future lines of research can be oriented to confirm if the results obtained in the present study (2016 period of analysis) are maintained over the years and to integrate the findings of effects of stock concentration of property (government holdings and majority shareholders)on stock return (7) with the effects of the floating capital ratio in stock markets.

