Trading Behaviour of Foreign Institutional Investors: Evidence from Indian Stock Markets
Paramita Mukherjee and
Sweta Tiwari (sweta.tiwari@imi-k.edu.in)
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Sweta Tiwari: International Management Institute
Asia-Pacific Financial Markets, 2022, vol. 29, issue 4, No 1, 605-629
Abstract:
Abstract The existence of behavioural bias such as positive feedback trading (PFT) and herding is well researched for advanced economies. This paper explores whether foreign institutional investors (FIIs), a prominent investor group, pursue these strategies in India. The contribution lies in the application of multiple measures of herding. Results indicate that FIIs exhibit PFT behaviour in equity and to some extent, in debt. At the individual stock level, FIIs herd during non-extreme market conditions, but market-level measures indicate absence of herding in extreme market conditions. In the bullish market, they behave more rationally compared to bearish or normal market conditions.
Keywords: Foreign investment; Feedback trading; Herding; Indian stock market; Trading behaviour; Institutional investment (search for similar items in EconPapers)
JEL-codes: G11 G14 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:kap:apfinm:v:29:y:2022:i:4:d:10.1007_s10690-022-09361-z
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DOI: 10.1007/s10690-022-09361-z
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