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Offshore investment funds : Monsters in emerging markets?

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  • Offshore investment funds
  • Kim, Woochan; Wei, Shang-Jin
  • National Bureau of Economic Research


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Title Offshore investment funds
Similar Titles
Sub Title

Monsters in emerging markets?

Material Type Reports
Author(English)

Kim, Woochan; Wei, Shang-Jin

Publisher

Cambridge:National Bureau of Economic Research

Date 1999-05
Series Title; No National Bureau of Economic Research / 7133
Pages 30
Subject Country United States(Americas)
Hong Kong(Asia and Pacific)
Singapore(Asia and Pacific)
South Korea(Asia and Pacific)
United Kingdom(Europe)
Language English
File Type Link
Original Format pdf
Subject Economy < Financial Policy
Holding National Bureau of Economic Research

Abstract

The 1997-99 financial crises in the emerging markets have brought to the foreground the concern about offshore investment funds and their possible role in exacerbating volatility in the markets they invest in. Offshore investment funds are alleged to engage in trading behaviors that are different from their onshore counterparts. Because their behavior is less moderated by tax consequences, and because they may be subject to less supervision and regulation, the offshore funds may trade more intensely. They could also pursue more aggressively certain trading strategies such as positive feedback trading or herding that could contribute to greater volatility in the market. Using a unique data set, we compare the trading behavior in Korea by offshore funds with that of their onshore counterparts registered in the United States and the United Kingdom. There are a number of interesting findings. (The rest omitted)