ABSTRACT
Sentiment is a determinant of investors’ trading decisions and behaviours. After a sentiment shock, investors’ net positions change differently across investor types. In response to a sentiment change, individual (institutional) investors follow a positive (negative) feedback strategy, reflecting their different trading and investment purposes.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 Korean companies disclose their annual financial statements in March. Our sample therefore includes the most recent financial information available in the market.
2 Foreign investors mostly consist of foreign institutions. The proportion of foreign individual investors is negligible.
3 For a robustness check, we incorporate the industrial production index and dividend yields into our regression model to control for potential macroeconomic effects on the next-period trading decisions of each investor type. The results are consistent with those in .