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

Timo Korkeamäki*, Nader Virk, Haizhi Wang, Peng Wang

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

3 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 languageEnglish
Pages (from-to)190-203
Number of pages14
JournalINTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
Volume64
DOIs
Publication statusPublished - 1 Jul 2019
MoE publication typeA1 Journal article-refereed

Keywords

  • China
  • Foreign investor
  • Institutional investor
  • Qualified foreign institutional investor (QFII) scheme

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