Can foreign equity funds outperform their benchmarks? New evidence from fund-holding data for China

Zhang, Jinhua; Wang, Guipu; Yan, Cheng

doi:10.1016/j.econmod.2020.04.025

Cited by 8 publications

(2 citation statements)

References 73 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…This sophistication is found in a number of countries in developing markets, including in China (Wang, 2014), Japan (Bae et al, 2008), and Taiwan (Weng & Tsai, 2018). This type of investor is also considered more sophisticated because of better market timing (Bae et al, 2008), able to take advantage of the firm's potential prospects in trading (Batten & Vo, 2015), and eliminate price errors in emerging markets (Zhang et al, 2020). This condition causes foreign investors to take most of their profits in trading (Bae et al, 2008).…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…This condition is the cause of resistance to these strategic actions by foreign parties, focusing on their own investment to maintain their competitive advantage (Likitwongkajon & Vithessonthi, 2020). Foreign investors are characterized as traders with superior information (Bae et al, 2008;Wang, 2014;Weng & Tsai, 2018), have the ability to eliminate price errors in emerging markets (Zhang et al, 2020) and are considered to reduce market anomalies (Shin & Park, 2018). Nevertheless, they are unavoidable from irrational issues in transactions (Mushinada, 2020) and herding ( Jeon & Moffett, 2010).…”

Section: Yes Yesmentioning

confidence: 99%

See 1 more Smart Citation

Firm Value in Indonesia: Will Foreigners be the Determinant?

Satrio

2022

JDM

View full text Add to dashboard Cite

Despite considerable scholarly attention, the literature on foreign investors is characterized by inconsistency and mixed findings. Using a sample of 427 non-financial firms during the period 2012 to 2019, this study provides robust evidence of the relationship between foreign investors and changes in firm value in the Indonesian setting. The investigation results using robust panel regression show that the trading behavior of foreign investors is the cause of the decline in firm value. This finding is robust with a number of repeated tests and endogeneity bias. The results of this study can be generalized to the capital markets of developing countries in Asia with thin market characteristics, high information inequality, and weak investor protection. This study is especially useful for regulators in formulating policies and academics.

show abstract