earticle

영어

In this paper, we theoretically examine whether or not asymmetric move, volume, and fear affect investment performances of two informed traders, who represents foreigners and locals in an emerging market, controlling for quality of information, strategy, and luck. We find that those asymmetries, separately or in combination, affect both traders’ performances. Specifically, a trader who moves earlier, trades more shares, or is more feared by other market participants outperforms the other, although both traders have the same information, investment strategies, and luck. This phenomenon is more pronounced when their information is correct. Even if their information is wrong, the basic results are kept intact unless their wrong information hurts more badly one trader than the other one. By examining in depth non-information sources of superior investment performances, this paper can shed some light on why foreigners often outperform locals even in the absence of clear evidence of superior information.