Do foreign institutional investors destabilize China's A-share markets?

被引：55
作者：
Schuppli, Michael [1 ]
Bohl, Martin T. [1 ]
机构：
[1] Westfal Wilhelms Univ Munster, Dept Econ, Stadtgraben 9, D-48143 Munster, Germany
来源：
JOURNAL OF INTERNATIONAL FINANCIAL MARKETS INSTITUTIONS & MONEY | 2010年 / 20卷 / 01期
关键词：
Foreign institutional investors; Feedback trading; Chinese stock markets; Regulation; Ownership restrictions;
D O I：
10.1016/j.intfin.2009.10.004
中图分类号：
F8 [财政、金融];
学科分类号：
0202 ;
摘要：
This paper investigates the effect of foreign institutional investors on the stability of Chinese stock markets. Previous literature views this investor group as destabilizing feedback traders. We use the abolition of ownership restrictions on A shares as a natural experiment. There is strong evidence that foreign institutions have a stabilizing effect on Chinese stock markets and contribute to market efficiency. This finding is robust across exchanges, sample periods, size quintiles and alternative model specifications. By contrast, domestic investors appear to engage in positive feedback trading. Our results have important implications for market regulation. (C) 2009 Elsevier B.V. All rights reserved.
引用
收藏
页码：36 / 50
页数：15
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