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Foreign portfolio investors before and during a crisis

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  • Foreign portfolio investors before and during a crisis
  • Kim, Woochan; Wei, Shang-Jin
  • National Bureau of Economic Research


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Title Foreign portfolio investors before and during a crisis
Similar Titles
Material Type Reports
Author(English)

Kim, Woochan; Wei, Shang-Jin

Publisher

Cambridge:National Bureau of Economic Research

Date 1999-02
Series Title; No NBER Working Paper Series / 6968
Pages 29
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Original Format pdf
Subject Economy < Financial Policy
Holding National Bureau of Economic Research

Abstract

Different categories of foreign portfolio investors in Korea have differences as well as similarities in their trading behavior before and during a currency crisis. First, non-resident institutional investors are always positive feedback traders, whereas resident investors were negative feedback (contrarian) traders before the crisis but switch to be positive feedback traders during the crisis. Second, individual investors herd significantly more than institutional investors. Non-resident (institutional as well as 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.