We examine whether outside investors mimic insider trades by analyzing the daily transactions of foreign institutional investors (FII) in the Indian emerging market. We find that the value relevance of insiders' opportunistic buy trades is much higher in our context relative to that reported for developed markets. More importantly, we find that FII mimic opportunistic buy trades, which is more pronounced for firms that are informationally more opaque or have lower corporate governance quality. A long-short strategy based on FII's transactions after opportunistic trades generates an additional abnormal return of approximately 29% annually, compared to transactions based on routines trades.

我们通过分析印度新兴市场中外国机构投资者（FII）的日常交易，检查外部投资者是否模仿内部交易。我们发现，就发达市场而言，内部人机会购买交易的价值相关性在我们的背景下要高得多。更重要的是，我们发现FII模仿机会购买交易，这对于信息更不透明或公司治理质量较低的公司而言更为明显。与基于常规交易的交易相比，基于机会交易后的FII交易的多空策略每年产生大约29％的额外异常收益。