Trading performance of foreign and domestic investors: Evidence from Indonesia during the crisis and recovery periods

This paper investigates relative trading performance of domestic vis-a-vis foreign investors in the Indonesia market. We take advantage of a unique dataset in the Indonesia market that codes foreign and domestic investors. We find that domestic investors outperform foreign investors in all transactions. However, in initiated trades, foreign investors tend to outperform domestic investors. Foreign advantage does not seem to deteriorate in a crisis period. Our results support Agarwal et al. (2010). However, trading performance seems to be more complex and interacts with different periods (crisis and recovery) and liquidity, resulting in different trading performance. © 2020 Elsevier B.V., All rights reserved.