Paper Type
Complete
Paper Number
PACIS2025-1407
Description
This research investigates the impact of financial Application Programming Interfaces (APIs) on foreign investors in the stock market. Traditionally, foreign investors have faced substantial barriers to participation due to the complexity and inefficiency of manually accessing financial information. The advent of APIs has simplified retrieval and analysis of corporate data, lowering entry barriers and narrowing the information asymmetry between domestic and foreign investors. Leveraging the introduction of OpenDART in South Korea, we analyze trading volumes, net-buying trends, and stock returns to assess the differential effects across investor types. Our findings reveal that financial APIs enhance foreign investors’ trade quality compared to domestic investors, particularly for opaque stocks with higher information asymmetry. These results highlight the role of technological innovation in mitigating information asymmetry and fostering cross-border investment.
Recommended Citation
Sohn, Bongjin; Lee, Gunwoong; Li, Ziru; and Lim, Jee-Hae, "The Transition of Open APIs of Stock Market on the Trading Outcomes in terms of Foreign Investors" (2025). PACIS 2025 Proceedings. 4.
https://aisel.aisnet.org/pacis2025/blockchain/blockchain/4
The Transition of Open APIs of Stock Market on the Trading Outcomes in terms of Foreign Investors
This research investigates the impact of financial Application Programming Interfaces (APIs) on foreign investors in the stock market. Traditionally, foreign investors have faced substantial barriers to participation due to the complexity and inefficiency of manually accessing financial information. The advent of APIs has simplified retrieval and analysis of corporate data, lowering entry barriers and narrowing the information asymmetry between domestic and foreign investors. Leveraging the introduction of OpenDART in South Korea, we analyze trading volumes, net-buying trends, and stock returns to assess the differential effects across investor types. Our findings reveal that financial APIs enhance foreign investors’ trade quality compared to domestic investors, particularly for opaque stocks with higher information asymmetry. These results highlight the role of technological innovation in mitigating information asymmetry and fostering cross-border investment.
Comments
Blockchain