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Information and Trading Risks in Global Investing: An Empirical Analysis of Research Location and Pacific Rim Mutual Fund Performance
Author(s) -
Hung Mingyi
Publication year - 2001
Publication title -
journal of international financial management and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.818
H-Index - 37
eISSN - 1467-646X
pISSN - 0954-1314
DOI - 10.1111/1467-646x.00064
Subject(s) - business , investment (military) , finance , investment strategy , pacific rim , investment management , open ended investment company , economics , return on investment , macroeconomics , archaeology , production (economics) , politics , political science , market liquidity , law , history
With the rapid growth of international investment, information and trading risk management has become increasingly important. Evidence suggests that investment companies use local offices as an effective way to manage both information and trading risks. This paper examines the evidence and asks what the characteristics are of investment companies that establish local research offices in foreign markets, and if companies that use local research offices show superior investment performance. My findings suggest that investment companies that manage large funds and use more company‐specific information are more likely to have Pacific Rim research offices. However, my results provide no evidence of superior investment performance by companies with local research offices.