English, Article, Journal or magazine article edition: Foreign Portfolio Investors Before and during a Crisis Woochan Kim; Shang-Jin Wei

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Bookmark: http://trove.nla.gov.au/version/135483
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Foreign Portfolio Investors Before and during a Crisis
Author
  • Woochan Kim
  • Shang-Jin Wei
Physical Description
  • preprint
Notes
  • Using a unique data set, we study the trading behavior of foreign portfolio investors in Korea before and during the currency crisis. Different categories of investors have significant differences as well as similarities. First, non-resident institutional investors are always positive feedback traders, whereas resident investors before the crisis were negative feedback (contrarian) traders but switch to be positive feedback traders during the crisis. Second, individual investors herd significantly more than institutional investors. Non-resident (institutional as well individual) investors herd significantly more than their resident counterparts. Third, differences in the Western and Korean news coverage are correlated with differences in net selling by non-resident investors relative to resident investors.
  • foreign portfolio investment, crisis, feedback trading, herding
  • RePEc:wop:cidhav:6
  • Different categories of foreign portfolio investors in Korea have differences as well as similarities in their trading behavior before and during a currency crisis. First, non-resident institutional investors are always positive feedback traders, whereas resident investors were negative feedback (contrarian) traders before the crisis but switch to be positive feedback traders during the crisis. Second, individual investors herd significantly more than institutional investors. Non-resident (institutional as well as individual) investors herd significantly more than their resident counterparts. Third, differences in the Western and Korean news coverage are correlated with differences in net selling by non-resident investors relative to resident investors.
  • RePEc:nbr:nberwo:6968
  • Different categories of foreign portfolio investors in Korea have differences as well as similarities in their trading behavior before and during the currency crisis. First, non-resident institutional investors are always positive feedback traders, whereas resident investors were negative feedback (contrarian) traders before the crisis but switch to be positive feedback traders during the crisis. Second, individual investors herd significantly more than institutional investors. Non-resident (institutional as well individual) investors herd significantly more than their resident counterparts. Third, differences in the Western and Korean news coverage are correlated with differences in net selling by non-resident investors relative to resident investors ... Les investisseurs en portefeuille étrangers en Corée présentent, selon les types, des différences et des similitudes dans leur comportement en matière de gestion de portefeuille avant et pendant la crise monétaire. Tout d’abord, si les effets de retour sont toujours positifs pour les investisseurs institutionnels non-résidents, ils sont négatifs avant la crise pour les investisseurs résidents puis deviennent positifs au cours de la crise. Deuxièmement, les investisseurs individuels ont beaucoup plus tendance que les investisseurs institutionnels à adopter un comportement grégaire sur les marchés, comme c’est aussi le cas des non-résidents (institutionnels et individuels) par rapport aux résidents. Troisièmement, les différences dans la couverture par la presse occidentale et coréenne des informations en provenance de la Corée sont en corrélation avec les différences dans les ventes nettes entre les investisseurs non-résidents et résidents ...
  • RePEc:oec:ecoaaa:210-en
Language
  • English
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