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Informational differences among institutional investors in an increasingly institutionalized market

  • Chiao, Chaoshin
  • Chen, Shin-Hui
  • Hu, Jia-Ming
Registered author(s):

    Studying the informativeness of institutional trades, this paper examines informational differences among institutional investors in the Taiwan stock market. Evidence shows that the net trades of (domestic) mutual funds impound information superior to the net trades of foreign investors and securities dealers, regardless of the selected formation and holding periods. The information advantage of mutual funds does not result from their trading persistence but from their stock-picking skill. The advantage is positively related to information asymmetry proxied by the smallness of firms, even after controlling for the risks associated with institutional equity preferences.

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    File URL: http://www.sciencedirect.com/science/article/B6VF1-4YHT7WH-1/2/08ce3411aa2e2dde0ae731c67c20064a
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    Article provided by Elsevier in its journal Japan and the World Economy.

    Volume (Year): 22 (2010)
    Issue (Month): 2 (March)
    Pages: 118-129

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    Handle: RePEc:eee:japwor:v:22:y:2010:i:2:p:118-129
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505557

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