Foreign Portfolio Investors Before and During a Crisis

Shang-Jin Wei and Woochan Kim ()

Working Papers from Chicago - Graduate School of Business

Abstract: Using a unique data set, we study the trading behavior of foreign portfolio investors in Korea before and during the currency crisis. Different categories of investors have significant differences as well as similarities. First, non-resident institutional investors are always positive feedback traders, whereas resident investors before the crisis were negative feedback (contrarian) traders but switch to be positive feedback traders during the crisis. Second, individual investors herd significantly more than institutional investors. Non-resident (institutional as well individual) investors herd significantly more than their resident counterparts. Third, differences in the Western and Korean news coverage are correlated with differences in net selling by non-resident investors relative to resident investors.

Keywords: INVESTMENTS; FINANCIAL MARKET (search for similar items in EconPapers)
JEL-codes: F21 F30 G15 (search for similar items in EconPapers)
Pages: 30 pages
Date: 1999
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Related works:
Journal Article: Foreign portfolio investors before and during a crisis (2002)
Working Paper: Foreign Portfolio Investors before and during a Crisis (1999)
Working Paper: Foreign Portfolio Investors Before and During a Crisis (1999)
Working Paper: Foreign Portfolio Investors Before and during a Crisis (1999)
Working Paper: Foreign Portfolio Investors before and during a Crisis (1999)
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