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Behavioural Biases of Japanese Institutional Investors; Fund management and Corporate Governance

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  • Suto, Megumi
  • 首藤, 惠
  • ストウ, メグミ
  • Toshino, Masashi
  • 俊野, 雅司
  • トシノ, マサシ

Abstract

This study examines the behavioural biases of Japanese institutional investors and discusses implications for their role in corporate governance, based on the findings of a questionnaire survey of fund managers carried out in 2003. Statistical analysis of the survey results reveals a short-term bias in fund managers' investment time horizons, herding, and self-marketing to improve the appearance of portfolio performance under the pressure either of customers or of institutional restraints. We conclude that institutional investors' behaviour contradicts their role as shareholders.

Suggested Citation

  • Suto, Megumi & 首藤, 惠 & ストウ, メグミ & Toshino, Masashi & 俊野, 雅司 & トシノ, マサシ, 2004. "Behavioural Biases of Japanese Institutional Investors; Fund management and Corporate Governance," CEI Working Paper Series 2004-12, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2004-12
    Note: 2nd International Conference on Corporate Governance: Effective Directors and Responsible Investors, June 29, 2004: Corporate Governance Centre Birmingham Business School, University of Birmingham
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/13911/wp2004-12a.pdf
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    References listed on IDEAS

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    1. John R. Nofsinger & Richard W. Sias, 1999. "Herding and Feedback Trading by Institutional and Individual Investors," Journal of Finance, American Finance Association, vol. 54(6), pages 2263-2295, December.
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