 Foreign investor trading behavior has evolvedOlena Onishchenko and Numan Ülkü Journal of Multinational Financial Management, 2019, vol. 51, issue C, 98-115 Abstract: Foreign (equity portfolio) investors have been characterized as return chasers in both the empirical and theoretical literature. Using 1996–1998 investor trading data from Korea, Choe et al. (2005) document that foreign investors trade at disadvantaged prices, because they trade after prices have moved against them. Using a 2004–2015 sample of Korean data, we show that these established facts have changed: foreigners do not any longer trade after prices have moved against them and are no longer disadvantaged; they trade at more favorable prices compared with domestic institutions. We document an essentially monotonic evolution of foreign investor trading behavior over time, from return chasing toward well-timed negative feedback trading, which parallels the improvement in their trading prices. Using marketwide-foreign investor trading data available from around the world, we show that foreigners’ shift away from positive feedback trading is a pervasive phenomenon. These findings imply a major empirical update on foreign investor trading behavior. Keywords: Foreign investors; Positive feedback trading; Average buying-selling prices (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:51:y:2019:i:c:p:98-115 DOI: 10.1016/j.mulfin.2019.04.005 Access Statistics for this article Journal of Multinational Financial Management is currently edited by I. Mathur and G. G. Booth More articles in Journal of Multinational Financial Management from Elsevier |
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