Market participants' trading behavior toward anomalies: Evidence from the Korean market

Donghoon Kim, Jangkoo Kang and Soohyun Roh

Pacific-Basin Finance Journal, 2025, vol. 90, issue C

Abstract: We examine the relationship between trading behavior and anomalies in the Korean stock market. Using a mispricing measure constructed from 26 statistically significant anomalies in the Korean stock market, we document the following results. First, individual investors are uninformed traders generating the anomalies. Second, institutional and foreign investors are, in general, sophisticated investors who exploit and mitigate the anomalies. Third, only some of the institutional and foreign investors are smart investors because only institutions involved in financial asset management and registered foreign investors effectively exploit anomalies.

Keywords: Market participant; Market anomalies; Individual investors; Institutional investors; Foreign investors; South Korea (search for similar items in EconPapers)
JEL-codes: G11 G12 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:90:y:2025:i:c:s0927538x24003743

DOI: 10.1016/j.pacfin.2024.102622

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