The impact of foreign equity investment flows on global linkages of the Asian emerging equity markets

S Poshakwale, Chandra Thapa

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

Evidence of the impact of foreign equity investment flows on the global linkages of the Asian emerging equity markets is provided. Findings confirm that there is a general trend towards greater integration and this process appears to be influenced by the increasing volumes of foreign equity portfolio investment flows. The results support the widely-held view that foreign investors are return chasers and their trading behaviour is based on information drawn from recent returns available in the emerging markets. The results also confirm the price-pressure hypothesis which suggests that foreign equity investors are mainly responsible for the increases in the stock market valuations in the Asian emerging markets. In view of the findings, the Asian emerging markets may become more vulnerable to the changes in foreign investment flows and turn more volatile in future.
LanguageEnglish
Pages1787-1802
Number of pages16
JournalApplied Financial Economics
Volume19
Issue number22
DOIs
Publication statusPublished - 28 Oct 2009

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Asia
Equity markets
Equity
Linkage
Asian emerging markets
Portfolio investment
Emerging markets
Trading behavior
Stock market valuation
Price pressure
Investors
Foreign investment
Foreign investors

Keywords

  • Asian markets
  • commerce
  • foreign investment

Cite this

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The impact of foreign equity investment flows on global linkages of the Asian emerging equity markets. / Poshakwale, S; Thapa, Chandra.

In: Applied Financial Economics, Vol. 19, No. 22, 28.10.2009, p. 1787-1802.

Research output: Contribution to journalArticle

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