New evidence for the determinants of foreign investment in an Asian market

Document Type

Article

Publication Date

1-1-2020

Abstract

This paper examines foreign investment in Vietnamese stock markets from 2013 to 2016. Previous studies for sample periods prior to 2013 find that foreigners invested relatively more in low liquidity shares. In contrast, this paper shows that foreigners now invest relatively more in high liquidity stocks. This study also investigates the investment determinants of foreign blockholders who own at least 5% of shares outstanding separately from those of the other foreign investors. The results show that foreign blockholders are more available to assume certain types of risk than the other foreign investors. Further, the investment preferences are similar between foreign blockholders and local blockholders. The results of the paper suggest that the availability of investors to assume risk, which is dependent on their wealth levels, is a possible explanation of equity home bias.

Publication Title

Afro-Asian Journal of Finance and Accounting

First Page Number

151

Last Page Number

167

DOI

10.1504/AAJFA.2020.106251

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