• Medientyp: E-Artikel
  • Titel: Do Foreign Investors Destabilize Stock Markets? A Reexamination of Korea in 2008
  • Beteiligte: Yang, Cheol‐Won
  • Erschienen: Wiley, 2017
  • Erschienen in: Asia-Pacific Journal of Financial Studies, 46 (2017) 5, Seite 734-759
  • Sprache: Englisch
  • DOI: 10.1111/ajfs.12189
  • ISSN: 2041-9945; 2041-6156
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  • Beschreibung: AbstractMotivated by Choe, Kho, and Stulz (1999) (CKS), this paper reexamines whether foreign investors destabilize the Korean stock markets during the 2008 global financial crisis. Consistent with CKS, large sales by foreigners don't result in significant negative returns over the next 25 minutes of trading. However, when the price impact is measured per trade, the impact of foreigners increases sharply during the crisis, and even surpasses that of Korean individuals and institutions. This is particularly pronounced in the permanent components, and in large, liquid stocks. The influence of foreigners therefore is not negligible in emerging markets, although it does not destabilize the whole market on its own.