Institutional Traders' Behavior in an Emerging Stock Market: Empirical Evidence on Polish Pension Fund Investors

The Pensions Institute Discussion Paper No. PI-0310

35 Pages Posted: 22 Sep 2003

See all articles by Martin T. Bohl

Martin T. Bohl

University of Muenster

Svitlana Voronkova

Centre for European Economic Research (ZEW)

Date Written: July 2003

Abstract

In this paper, we contribute to the literature on institutional herding and positive feedback trading by analysing the investment behavior of pension funds on the Polish stock market. Since pension funds in Poland operate under more stringent investment regulation than their counterparts in mature markets, we aim to gain additional insight into the behavior of this type of institutional investors acting in an emerging capital market. Our results show that Polish pension fund investors are to a greater extent involved in herd-like behavior and more often pursue feedback trading strategies than their mature peers. This finding is primarily attributed to regulatory inefficiencies and high market concentration. We do not detect, however, that trading by the pension funds exerts significant influence on stock prices.

Keywords: Pension funds, Herding, Feedback trading, Polish stock market

JEL Classification: G20, G23

Suggested Citation

Bohl, Martin T. and Voronkova, Svitlana, Institutional Traders' Behavior in an Emerging Stock Market: Empirical Evidence on Polish Pension Fund Investors (July 2003). The Pensions Institute Discussion Paper No. PI-0310, Available at SSRN: https://ssrn.com/abstract=426680 or http://dx.doi.org/10.2139/ssrn.426680

Martin T. Bohl (Contact Author)

University of Muenster ( email )

Schlossplatz 2
D-48149 Muenster, D-48149
Germany

Svitlana Voronkova

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

HOME PAGE: http://www.zew.de/de/mitarbeiter/mitarbeiter.php3?action=mita&kurz=sva

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