Foreign Portfolio Investors before and during a Crisis

Woochan Kim () and Shang-Jin Wei

CID Working Papers from Center for International Development at Harvard University

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: foreign portfolio investment; crisis; feedback trading; herding (search for similar items in EconPapers)
JEL-codes: F21 F3 G15 (search for similar items in EconPapers)
Date: 1999-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (49)

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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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Persistent link: https://EconPapers.repec.org/RePEc:wop:cidhav:6

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