Portfolio Preferences of Foreign Institutional Ivestors
The authors examine the relationship between foreign investment and the attributes of emerging market countries and firms in which investment is made. Their findings indicate that countries with higher levels of economic development and floating ex...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/07/2493514/portfolio-preferences-foreign-institutional-investors http://hdl.handle.net/10986/18157 |
| Summary: | The authors examine the relationship
between foreign investment and the attributes of emerging
market countries and firms in which investment is made.
Their findings indicate that countries with higher levels of
economic development and floating exchange rate regimes tend
to have greater ability to obtain foreign capital. After
controlling for the country's level of economic
development, they find that firms in countries with stronger
shareholder rights and legal framework attract more foreign
capital. The authors also find that foreign institutions
allocate more of their assets to firms with better corporate
governance after controlling for other country and firm
attributes. The main firm-level measures of corporate
governance are derived from accounting quality variables.
Their results imply that steps can be taken both at the
country and the firm level to create an environment
conducive to foreign portfolio investment. The analysis is
based on a unique dataset consisting of equity positions of
U.S. mutual funds in emerging markets. |
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