Performance and Informed Trading. Comparing Foreigners, Institutions and Individuals in an Emerging Stock Market

Publicado en

  • Journal of International Money and Finance

Resumen

  • Do local institutions, local individuals or foreigners perform better in a small emerging market? We seek answers to this question by examining the investment performance of each group of investors using two unique databases of Colombian stocks. Our analysis serves as an out-of-sample test of previous findings. We find that local institutions have better outcomes than foreigners and local individuals on all performance measures. Furthermore, local individuals perform better than foreigners on trading execution, while foreigners generate better long-term returns. Using a bid-ask spread decomposition, we provide additional evidence that the better performance of institutions is consistent with informational advantages. Our findings reconcile contradictory statements from previous studies.

fecha de publicación

  • 2019

Líneas de investigación

  • Bid-Ask Spread Decomposition
  • Foreign Investors
  • Individual Investors
  • Informed Trading
  • Institutional Investors
  • Performance

Página inicial

  • 187

Última página

  • 203

Volumen

  • 90

Issue

  • C