Abstract
This article examines the influence of foreign investor trading on information asymmetry in the Korean stock market, a representative emerging market characterized by a high level of information asymmetry between corporate insiders and outsiders, and among investors. We find a significantly positive relationship between foreign investor trading and the consequent bid–ask spread–the latter of which is considered as a proxy for the degree of information asymmetry–on both daily and weekly bases. Our results indicate that active foreign investor trading tends to exacerbate informational variation.
| Original language | English |
|---|---|
| Pages (from-to) | 540-544 |
| Number of pages | 5 |
| Journal | Applied Economics Letters |
| Volume | 24 |
| Issue number | 8 |
| DOIs | |
| State | Published - 4 May 2017 |
Keywords
- bid–ask spread
- Foreign investor trading
- information asymmetry
- trading volume
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