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

14 Pages Posted: 28 Mar 2006

See all articles by Martin T. Bohl

Martin T. Bohl

University of Muenster

Svitlana Voronkova

Centre for European Economic Research (ZEW)

Abstract

In this paper, we contribute to the literature on institutional herding and feedback trading by analysing the investment behavior of pension funds on the Polish stock market. Pension funds entered into the stock market due to the national pension system reform in 1999, providing a unique opportunity to receive deeper insight into the behavior of institutional investors in an emerging capital market. Our results show that Polish pension fund investors are to a greater extent involved in herd-like behavior and pursue feedback trading strategies more often than their counterparts in mature markets. This finding is primarily attributed to a stringent investment regulation and high market concentration. We do not detect, however, that trading by the pension funds exerts significant influence on the future stock prices.

Suggested Citation

Bohl, Martin T. and Voronkova, Svitlana, Institutional Traders' Behavior in an Emerging Stock Market: Empirical Evidence on Polish Pension Fund Investors. Journal of Business Finance & Accounting, Vol. 32, No. 7-8, pp. 1537-1560, September 2005, Available at SSRN: https://ssrn.com/abstract=877434 or http://dx.doi.org/10.1111/j.0306-686X.2005.00639.x

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

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