TY  - JOUR
AU  - Choe,Hyuk
AU  - Kho,Bong-Chan
AU  - Stulz,Rene M.
TI  - Do Foreign Investors Destabilize Stock Markets?  The Korean Experience  in 1997
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6661
PY  - 1998
Y2  - July 1998
UR  - http://www.nber.org/papers/w6661
L1  - http://www.nber.org/papers/w6661.pdf
N1  - Author contact info:
Rene M. Stulz
The Ohio State University
Fisher College of Business
806A Fisher Hall
Columbus, OH 43210-1144
Tel: 614/292-1970
Fax: 614/292-2359
E-Mail: stulz_1@cob.osu.edu
M2  - featured in NBER digest on 1998-10-01
AB  - This paper examines the impact of foreign investors on stock returns in Korea from November 30, 1996, to the end of 1997 using trade data.  We find strong evidence of positive feedback trading and herding by foreign investors before the period of Korea's economic crisis during the last three months of 1997.  The evidence of herding becomes weaker during the crisis period and positive feedback trading by foreign investors disappears.  We find no evidence that trades by foreign investors had a destabilizing effect on Korea's stock market over our sample period.  In particular, the market adjusted quickly and efficiently to large sales by foreign investors and these sales were not followed by negative abnormal returns amplifying their impact.
ER  -