This paper uses unique data on the shareholdings of both institutional and individual investors to directly investigate whether institutional investors have better stock selection ability than individual investors in China. Controlling for other factors, we find that institutional investors...

Many have noticed the phenomenon that naive investors are attracted to the market as stock prices soar, yet few empirical studies have tested for this bubble phenomenon. This paper presents previously unused data on the aggregate number of newly opened brokerage accounts in China and tests the...