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US and Domestic Market Gains and Asian Investors’ Overconfident Trading Behavior
Author(s) -
Chuang WenI,
Lee BongSoo,
Wang KaiLi
Publication year - 2013
Publication title -
financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.647
H-Index - 68
eISSN - 1755-053X
pISSN - 0046-3892
DOI - 10.1111/fima.12030
Subject(s) - stock market , monetary economics , stock (firearms) , business , institutional investor , financial economics , financial market , third market , financial crisis , economics , financial system , bond market , finance , corporate governance , mechanical engineering , paleontology , macroeconomics , horse , engineering , biology
We find that subsequent to both US and domestic market gains, both Asian individual and institutional investors increase their trading and that this effect is more pronounced in bull markets, in periods of relatively favorable investor sentiment, in periods of extremely high market returns, and in markets with short‐sale constraints. We also find that individual investors trade more in response to market gains than institutional investors. Moreover, we find that further integration of Asian stock markets with US stock markets after the Asian financial crisis in 1998 is an important reason for Asian investors’ response to US market gains.