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

Finance, Helsinki

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

17 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
Peer-reviewed scientific journal	International Review of Financial Analysis
Volume	64
Issue number	July
Pages (from-to)	190-203
Number of pages	14
ISSN	1057-5219
DOIs	https://doi.org/10.1016/j.irfa.2019.05.011
Publication status	Published - 01.07.2019
MoE publication type	A1 Journal article - refereed

Keywords

512 Business and Management
Foreign investor
Institutional investor
Qualified foreign institutional investor (QFII) scheme
China

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

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Keywords

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