EconPapers    
Economics at your fingertips  
 

Foreigners’ trading and stock returns in Spain

Eva Porras and Numan Ülkü

Journal of International Financial Markets, Institutions and Money, 2015, vol. 34, issue C, 111-126

Abstract: Using monthly foreign flows data from Madrid Stock Exchange, we analyze the interaction between foreigners’ trading and stock returns, both marketwide and on individual stocks. We show that global risk appetite has a significant role in driving marketwide foreign investor flows. Our data of foreigners’ trading in individual stocks, the first on a major European market, enables an out-of-sample assessment of the theories of foreign investor behavior. Positive feedback trading, an alleged symptom of information disadvantage, is visible in individual stocks, whereas negative feedback trading is observed at the market-wide level, especially by US investors who have currency exposure.

Keywords: Foreign investor flows in equity markets; Feedback trading; Portfolio rebalancing (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 G15 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042443114001401
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:34:y:2015:i:c:p:111-126

DOI: 10.1016/j.intfin.2014.11.008

Access Statistics for this article

Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely

More articles in Journal of International Financial Markets, Institutions and Money from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2021-07-10
Handle: RePEc:eee:intfin:v:34:y:2015:i:c:p:111-126