IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v48y2012is3p175-189.html
   My bibliography  Save this article

Are Foreign Institutions More or Less Informed? Evidence from China's Stock Markets

Author

Listed:
  • Yanjian Zhu
  • Yuexiang Jiang

Abstract

We compare the trading activities of foreign institutions in China's B-share market to those of domestic institutions in the A-share market before the same private information was released to both markets. Our findings show that both types of institutions were informed about which firms would implement the share structure reform in the next batch of reform. Foreign institutions bought even more shares than domestic ones in the days closely preceding reform announcements. Furthermore, both of them traded aggressively with large trades to profit from their private information. We can calculate the impact of large buy trades initiated by foreign and domestic institutional investors in each day. The impact increased in days before the Share Structure Reform for both foreign and domestic institutional investors. In addition, we find that the impact of large buy trades initiated by foreign institutions on price changes increased in days before the Share Structure Reform more than those initiated by domestic ones in the same days.

Suggested Citation

  • Yanjian Zhu & Yuexiang Jiang, 2012. "Are Foreign Institutions More or Less Informed? Evidence from China's Stock Markets," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(S3), pages 175-189, September.
    • Handle: RePEc:mes:emfitr:v:48:y:2012:i:s3:p:175-189
    as

    Download full text from publisher

    File URL: http://mesharpe.metapress.com/link.asp?target=contribution&id=8P54L04916015043
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Donald Lien & Chun-Da Chen, 2020. "B-share discount puzzle in China: a revisit of dual-share firms," Review of Managerial Science, Springer, vol. 14(5), pages 1047-1075, October.
    2. Deng, Chao & Li, Shiyu & Hong, Yun, 2024. "When local and foreign investors meet the Chinese government's risk perception about COVID-19," Journal of Multinational Financial Management, Elsevier, vol. 74(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:48:y:2012:i:s3:p:175-189. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.