Do institutional investors perform better in emerging markets?

K.N. Badhani, Ashish Kumar, Xuan Vinh Vo and Mangesh Tayde

International Review of Economics & Finance, 2023, vol. 86, issue C, 1041-1056

Abstract: Emerging markets with their imperfections, low liquidity, and dominance of naive retail investors are likely to provide attractive profit-making opportunities for sophisticated and resourceful institutional investors. The institutional investors traditionally had low participation in these markets, but it has grown tremendously during recent years. Therefore, these markets provide a natural experimental setting to understand the implications of their activities on asset pricing and to evaluate their market timing and stock-picking skills. In this study, we compare the performance of foreign institutional investors (FIIs) and domestic institutional investors (DIIs) in one of the important Asian emerging markets.

Keywords: Institutional investors; Market-timing skill; Security picking skill; Price-pressure; Base brooding; Emerging markets (search for similar items in EconPapers)
JEL-codes: G11 G14 G23 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:86:y:2023:i:c:p:1041-1056

DOI: 10.1016/j.iref.2022.01.003

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