Learning Chinese? The changing investment behavior of foreign institutions in the Chinese stock market

Timo Korkeamäki; Nader Virk; Haizhi Wang; Peng Wang

doi:10.1016/j.irfa.2019.05.011

Learning Chinese? The changing investment behavior of foreign institutions in the Chinese stock market

Timo Korkeamäki, Nader Virk, Haizhi Wang, Peng Wang

Research output: Contribution to journal › Article › peer-review

19 Citations (Scopus)

Abstract

We analyze preferences of foreign institutional investors in the Chinese stock market in a sample that covers 2003 to 2014. We find that foreign investors changed their investment behavior during the sample period from generic patterns found in much of the world to China-specific patterns. The results suggest that foreign institutions learned to adjust their investment behavior to account for unique features of the Chinese market. Rather than following the diversified portfolio approach, they follow investment strategies that focus on a limited number of firm features.

Original language	English
Pages (from-to)	190-203
Number of pages	14
Journal	International Review of Financial Analysis
Volume	64
Early online date	12 Jun 2019
DOIs	https://doi.org/10.1016/j.irfa.2019.05.011
Publication status	Published - 1 Jul 2019
Externally published	Yes

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10.1016/j.irfa.2019.05.011Licence: CC BY-NC-ND

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title = "Learning Chinese? The changing investment behavior of foreign institutions in the Chinese stock market",

abstract = "We analyze preferences of foreign institutional investors in the Chinese stock market in a sample that covers 2003 to 2014. We find that foreign investors changed their investment behavior during the sample period from generic patterns found in much of the world to China-specific patterns. The results suggest that foreign institutions learned to adjust their investment behavior to account for unique features of the Chinese market. Rather than following the diversified portfolio approach, they follow investment strategies that focus on a limited number of firm features.",

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AU - Korkeamäki, Timo

AU - Virk, Nader

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AU - Wang, Peng

PY - 2019/7/1

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N2 - We analyze preferences of foreign institutional investors in the Chinese stock market in a sample that covers 2003 to 2014. We find that foreign investors changed their investment behavior during the sample period from generic patterns found in much of the world to China-specific patterns. The results suggest that foreign institutions learned to adjust their investment behavior to account for unique features of the Chinese market. Rather than following the diversified portfolio approach, they follow investment strategies that focus on a limited number of firm features.

AB - We analyze preferences of foreign institutional investors in the Chinese stock market in a sample that covers 2003 to 2014. We find that foreign investors changed their investment behavior during the sample period from generic patterns found in much of the world to China-specific patterns. The results suggest that foreign institutions learned to adjust their investment behavior to account for unique features of the Chinese market. Rather than following the diversified portfolio approach, they follow investment strategies that focus on a limited number of firm features.

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KW - Foreign investor

KW - Institutional investor

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EP - 203

JO - International Review of Financial Analysis

JF - International Review of Financial Analysis

SN - 1057-5219

ER -

Learning Chinese? The changing investment behavior of foreign institutions in the Chinese stock market

Abstract

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