Learning Chinese? The Changing Investment Behavior of Foreign Institutions in the Chinese Stock Market

37 Pages Posted: 21 Nov 2018 Last revised: 18 Nov 2021

See all articles by Timo Korkeamäki

Timo Korkeamäki

Hanken School of Economics

Nader Virk

Swansea University School of Management; Hanken School of Economics - Department of Finance and Statistics; University of Plymouth; Hanken School of Economics

Haizhi Wang

Illinois Institute of Technology - Stuart School of Business

Peng Wang

University of Southampton

Date Written: November 19, 2018

Abstract

We analyze preferences of foreign institutional investors in the Chinese stock market in a sample that covers 2003 to 2014. We find foreign investors changed their investment behavior during the sample period from generic patterns found in much of the world to China-specific patterns. The results suggest that foreign institutions learned to adjust their investment behavior to account for unique features of the Chinese market.

Keywords: foreign investor, institutional investor, Qualified Foreign Institutional Investor (QFII) scheme, China

JEL Classification: G11, G15

Suggested Citation

Korkeamäki, Timo and Virk, Nader and Wang, Haizhi and Wang, Peng, Learning Chinese? The Changing Investment Behavior of Foreign Institutions in the Chinese Stock Market (November 19, 2018). BOFIT Discussion Paper No. 19/2018, Available at SSRN: https://ssrn.com/abstract=3288388 or http://dx.doi.org/10.2139/ssrn.3288388

Timo Korkeamäki (Contact Author)

Hanken School of Economics

Helsinki

Nader Virk

Swansea University School of Management ( email )

Haldane Building
Singleton Park
Swansea, SA2 8PP
United Kingdom

Hanken School of Economics - Department of Finance and Statistics ( email )

FI-00101 Helsinki
Finland

University of Plymouth ( email )

Drake Circus
Plymouth, Devon PL48AA
United Kingdom

Hanken School of Economics ( email )

P.O. Box 479
Helsinki, Helsinki 00101
Finland

Haizhi Wang

Illinois Institute of Technology - Stuart School of Business ( email )

Stuart Graduate School of Business
565 W. Adams St.
Chicago, IL 60661
United States

Peng Wang

University of Southampton ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

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