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Who moves the stock market in an emerging country – Institutional or retail investors?

Author

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  • Koesrindartoto, Deddy P.
  • Aaron, Aurelius
  • Yusgiantoro, Inka
  • Dharma, Wirata A.
  • Arroisi, Abdurrohman

Abstract

By analyzing the dynamic behavior of institutional and retail investors in the Indonesia Stock Exchange using their completed transactions (comprising over 250 million observations), this study highlights that their trading strategies and behavior, in which institutions play a more important role than individuals in the market, are indeed different. Specifically, past trading activities by individual (institutional) investors have significantly affected the current trading behaviors and strategies of individual investors (both investor types). Furthermore, retail (institutional) investors are most likely to perform contrarian (momentum) strategies and trade frequently (infrequently) with small (large) amounts of money and short (long) holding periods.

Suggested Citation

  • Koesrindartoto, Deddy P. & Aaron, Aurelius & Yusgiantoro, Inka & Dharma, Wirata A. & Arroisi, Abdurrohman, 2020. "Who moves the stock market in an emerging country – Institutional or retail investors?," Research in International Business and Finance, Elsevier, vol. 51(C).
    • Handle: RePEc:eee:riibaf:v:51:y:2020:i:c:s0275531919300327
    DOI: 10.1016/j.ribaf.2019.101061
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    More about this item

    Keywords

    Market microstructure; Emerging market; Institutional investors; Individual investors; Trading strategies;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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