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dc.contributor.authorKim, Woochan
dc.contributor.authorWei, Shang-Jin
dc.date.accessioned2019-05-01T11:38:26Z
dc.date.issued2001-06
dc.identifier.citationKim, Woochan, and Shang-Jin Wei. “Offshore Investment Funds: Monsters in Emerging Markets?” CID Working Paper Series 2001.69, Harvard University, Cambridge, MA, June 2001.en_US
dc.identifier.urihttp://nrs.harvard.edu/urn-3:HUL.InstRepos:39608939*
dc.description.abstractThe 1997-98 financial crises in the emerging markets have brought to the foreground the concern about offshore investment funds and their possible role in exacerbating financial market volatility. Offshore investment funds are alleged to engage in trading behaviors that are different from their onshore counterparts. Because they are less moderated by tax consequences, and are subject to less supervision and regulation, the offshore funds may trade more intensely. They could also engage more aggressively in certain trading patterns such as positive feedback trading or herding that could contribute to greater market volatility. Using a unique data set, we compare the trading behavior in Korea by offshore funds with three sets of onshore funds as control groups. There are a number of interesting findings. First, the offshore funds do trade more intensely than their onshore counterparts. Second, however, the offshore funds do not engage in positive feedback trading in a significant way. In contrast, there is strong evidence that the onshore funds from the U.S. and U.K. do. Third, while offshore funds herd, they do so significantly less than the onshore funds during the crisis. In sum, the offshore funds are not especially worrisome monsters.en_US
dc.language.isoen_USen_US
dc.publisherCenter for International Development at Harvard Universityen_US
dc.relation.isversionofhttps://www.hks.harvard.edu/centers/cid/publicationsen_US
dash.licenseLAA
dc.titleOffshore Investment Funds: Monsters in Emerging Markets?en_US
dc.typeResearch Paper or Reporten_US
dc.description.versionAccepted Manuscripten_US
dc.relation.journalCID Working Paper Seriesen_US
dc.date.available2019-05-01T11:38:26Z


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