Crossing Borders: Foreign Investment and Sentiment in Korea |
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Authors: | Inbin Hwang Deokjong Jeong |
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Institution: | 1. Korea Institute for Defense Analyses, Seoul, Republic of Korea;2. School of Business &3. Technology Management, Korea Advanced Institute of Science and Technology (KAIST), Daejeon, Republic of Korea |
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Abstract: | This study examines the effect of global investor sentiment on capital inflows in the Korean stock and bond markets using textual analysis. First, we conclude that global investor sentiment about Korea causes fluctuations in capital inflows to the Korean stock market. Second, global investor sentiment about Korea causes foreign investors to modify their investments but not by enough to cause drastic changes. Third, positive sentiment about Asia-Pacific countries results in more foreign investment in Korea. The results suggest that research on global investor sentiment provides insight into the determinants of capital flows and has implications for capital flow management policies. |
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Keywords: | Capital inflows foreign investment investor sentiment textual analysis Korea |
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