Banks, the IMF, and the Asian Crisis

This paper examines the impact of the Asian crisis on bank stocks across four Western countries and six Asian countries. In the second half of 1997, Western banks experienced positive returns. In contrast East Asian bank indices incurred losses in excess of 60% in each of the crisis countries. Most of this poor performance is explained by the exposure of the banks to general stock market movements in their countries. Currency exposures affected banks adversely beyond their stock market impact only in Indonesia and the Philippines. Except for the Korean program, IMF programs had little effect on bank values. The announcement of the Korean program increased shareholder wealth at the U.S. banks with the highest reported exposure in Korea by about 7% and had a favorable effect on bank shareholder wealth in all the countries in our sample but one. There is no evidence that the Korean IMF program had a positive impact on banks without exposure to Korea and hence our results do not support the argument that such programs reduce systemic risk.

Do Foreign Investors Destabilize Stock Markets? The Korean Experience in 1997

This paper examines the impact of foreign investors on stock returns in Korea from November 30, 1996, to the end of 1997 using trade data. We find strong evidence of positive feedback trading and herding by foreign investors before the period of Korea's economic crisis during the last three months of 1997. The evidence of herding becomes weaker during the crisis period and positive feedback trading by foreign investors disappears. We find no evidence that trades by foreign investors had a destabilizing effect on Korea's stock market over our sample period. In particular, the market adjusted quickly and efficiently to large sales by foreign investors and these sales were not followed by negative abnormal returns amplifying their impact.

Do Domestic Investors Have an Edge? The Trading Experience of Foreign Investors in Korea

We investigate whether domestic investors have an edge over foreign investors in trading domestic stocks.Using Korean data, we show that foreign money managers pay more than domestic money managers when they buy and receive less when they sell for medium and large trades. The sample average daily trade-weighted disadvantage of foreign money managers is of 21 basis points for purchases and 16 basis points for sales. There is also some evidence that domestic individual investors have an edge over foreign investors. The explanation for these results is that prices move more against foreign investors than against domestic investors before trades.

Do Domestic Investors Have More Valuable Information About Individual Stocks Than Foreign Investors?

Using trade data from Korea from December 1996 to November 1998, we find evidence that domestic individual investors have a short-lived private information advantage for individual stocks over foreign investors, but almost no evidence that domestic institutional investors have such an advantage. Foreign investors trade at worse prices than resident investors for large trades, for smaller stocks, and more so for sales than for purchases. Foreign investors sell to domestic investors before a stock has a large positive abnormal return and buy from domestic investors before a stock has a large negative abnormal return. Using intraday data, the large trades of domestic individual investors have more information than the large trades of foreign investors or of domestic institutional investors.

Financial globalization, governance, and the evolution of the home bias

Standard portfolio theories of the home bias are disconnected from corporate finance theories of insider ownership. We merge the two into what we call the optimal ownership theory of the home bias. The theory has the following components. In countries with poor governance, it is optimal for insiders to own large stakes in corporations and for large shareholders to monitor insiders. Foreign portfolio investors will exhibit a large home bias against such countries because their investment is limited by the shares held by insiders (the "direct effect" of poor governance) and domestic monitoring shareholders ("the indirect effect").> ; Foreigners can also enter as foreign direct investors; if they are from countries with good governance, they have a comparative advantage as insider monitors in countries with poor governance, so that the relative importance of foreign direct investment in total foreign equity investment is negatively related to the quality of governance. Using two datasets, we find strong evidence that the theory can help explain the evolution of the home bias. Using country-level U.S. data, we find that on average the home bias of U.S. investors towards the 46 countries with the largest equity markets did not fall over the past decade, but it decreased the most towards countries in which the ownership by corporate insiders decreased, and the importance of foreign direct investment fell in countries in which ownership by corporate insiders fell. Using firm-level data for Korea, we find evidence of the additional indirect effect of poor governance on portfolio equity investment by foreign investors.Investments, Foreign ; Globalization

Broadband hyperspectral imaging for breast tumor detection using spectral and spatial information

Complete tumor removal during breast-conserving surgery remains challenging due to the lack of optimal intraoperative margin assessment techniques. Here, we use hyperspectral imaging for tumor detection in fresh breast tissue. We evaluated different wavelength ranges and two classification algorithms; a pixel-wise classification algorithm and a convolutional neural network that combines spectral and spatial information. The highest classification performance was obtained using the full wavelength range (450-1650nm). Adding spatial information mainly improved the differentiation of tissue classes within the malignant and healthy classes. High sensitivity and specificity were accomplished, which offers potential for hyperspectral imaging as a margin assessment technique to improve surgical outcome. (C) 2019 Optical Society of America under the terms of the OSA Open Access Publishing Agreemen