Institutional Investors and Long-Term Investment : Evidence from Chile
Developing countries are trying to develop long-term financial markets and institutional investors are expected to play a key role. This paper uses unique evidence on the universe of institutional investors from the leading case of Chile to study t...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/06/19680163/institutional-investors-long-term-investment-evidence-chile http://hdl.handle.net/10986/18756 |
| id |
okr-10986-18756 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AGENCY PROBLEMS ASSET CLASS ASSET CLASSES ASSET HOLDINGS ASSET MANAGERS ASSET PRICES ASSET VALUES ASSET-LIABILITY MISMATCH ASYMMETRIC INFORMATION AUCTION AUCTION AMOUNT AUCTIONS BANK DEPOSITS BANK POLICY BANKING SECTOR BANKING SYSTEM BID BIDS BOND BOND AUCTIONS BOND FUNDS BOND INDEX BOND INDICES BOND MARKETS BORROWER CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CAPITAL REQUIREMENT CASH FLOWS CENTRAL BANK CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE BOND CORPORATE BOND MARKET CORPORATE BONDS CORPORATE DEBT CORPORATE INVESTMENT DEBT DEBT HOLDINGS DEBT ISSUANCES DEBT MATURITIES DEBT MATURITY DEBTORS DEFAULT RISK DERIVATIVES DERIVATIVES MARKETS DEVELOPING COUNTRIES DISCLOSURE REQUIREMENTS DOLLAR BONDS DOMESTIC INSTITUTIONAL INVESTORS DOMESTIC MARKET EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET DEBT EMERGING MARKETS EQUITIES EQUITY HOLDING EQUITY INSTRUMENTS EXCHANGE RATES FAIR VALUE FEDERAL RESERVE FEDERAL RESERVE BANK FIDUCIARY RESPONSIBILITY FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL STABILITY FINANCIAL STUDIES FINANCIAL SUPPORT FINANCIAL SYSTEM FIXED INCOME FIXED INCOME INVESTMENT FIXED INCOME MARKET FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FUND MANAGERS GLOBAL DEVELOPMENT FINANCE GOVERNMENT BOND GOVERNMENT BONDS GOVERNMENT DEBT GOVERNMENT PAPER HOLDINGS HOLDINGS OF BANK INDEXED BONDS INFLATION INFLATION RISK INFLATION RISKS INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTEREST RATE INTEREST RATE DERIVATIVES INTERNATIONAL BANK INTERNATIONAL DIVERSIFICATION INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL PORTFOLIO INTERNATIONAL SETTLEMENTS INVESTING INVESTMENT BEHAVIOR INVESTMENT HORIZON INVESTMENT HORIZONS INVESTMENT INSTRUMENTS INVESTMENT OPPORTUNITIES INVESTMENT PORTFOLIO INVESTMENTS IN EQUITY INVESTOR BASE INVESTOR DEMAND INVESTOR REDEMPTIONS ISSUANCE ISSUANCES LEVEL OF CONFIDENCE LIABILITY LIFE INSURANCE LIFE INSURANCE COMPANIES LIFE INSURANCE COMPANY LIQUID ASSETS LIQUIDATIONS LIQUIDITY LIQUIDITY CRISES LIQUIDITY RATIO LOCAL CURRENCY LONG-TERM ASSETS LONG-TERM CAPITAL LONG-TERM DEBT LONG-TERM DEBT MARKET LONG-TERM FINANCE LONG-TERM INSTRUMENTS LONG-TERM INVESTMENT LONG-TERM INVESTMENTS LONG-TERM INVESTORS LONG-TERM LIABILITIES LONG-TERM PAPER MARK TO MARKET MARK-TO-MARKET MARK-TO-MARKET ACCOUNTING MARKET CONDITIONS MARKET LIQUIDITY MARKET MECHANISM MARKET PARTICIPANTS MARKET PLAYERS MARKET PRICES MATURITIES MATURITY MATURITY DATE MATURITY SPECTRUM MATURITY STRUCTURE MATURITY STRUCTURES MONETARY POLICY MONEY MARKET MONEY MARKET INSTRUMENT MORAL HAZARD MORTGAGES MUTUAL FUND MUTUAL FUND INDUSTRY MUTUAL FUND MANAGERS MUTUAL FUNDS OPEN-END FUNDS OPPORTUNITY COST OUTSTANDING DEBT PENSION PENSION FUND PENSION FUNDS PENSION REFORM PENSION REFORMS PENSION SYSTEM PENSION SYSTEMS PENSIONS PORTFOLIO PORTFOLIO CHOICE PORTFOLIO HOLDINGS PORTFOLIO INVESTMENTS PORTFOLIO REGULATIONS PORTFOLIOS PRICE RISK PRINCIPAL-AGENT PROBLEM PRINCIPAL-AGENT PROBLEMS PUBLIC FINANCE PUBLIC SAVINGS RATE OF RETURN REGULATORY PRACTICES RETAIL INVESTORS RETIREMENT INCOME SECURITY RETURN RETURNS RISK AVERSION RISK EXPOSURE RISK FACTORS RISK PROFILE RISK PROFILES SECURITIES SECURITIES MARKETS SHORT MATURITIES SHORT MATURITY SHORT-TERM ASSET SHORT-TERM ASSETS SHORT-TERM BONDS SHORT-TERM DEBT SHORT-TERM INSTRUMENTS SOVEREIGN BONDS SOVEREIGN DEBT STOCKS TOTAL DEBT TRADING TRANCHE TRANCHES TRANSACTION TRANSACTION COSTS TRANSPARENCY TREASURY TURNOVER TYPE OF INVESTOR YIELD CURVE |
| spellingShingle |
AGENCY PROBLEMS ASSET CLASS ASSET CLASSES ASSET HOLDINGS ASSET MANAGERS ASSET PRICES ASSET VALUES ASSET-LIABILITY MISMATCH ASYMMETRIC INFORMATION AUCTION AUCTION AMOUNT AUCTIONS BANK DEPOSITS BANK POLICY BANKING SECTOR BANKING SYSTEM BID BIDS BOND BOND AUCTIONS BOND FUNDS BOND INDEX BOND INDICES BOND MARKETS BORROWER CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CAPITAL REQUIREMENT CASH FLOWS CENTRAL BANK CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE BOND CORPORATE BOND MARKET CORPORATE BONDS CORPORATE DEBT CORPORATE INVESTMENT DEBT DEBT HOLDINGS DEBT ISSUANCES DEBT MATURITIES DEBT MATURITY DEBTORS DEFAULT RISK DERIVATIVES DERIVATIVES MARKETS DEVELOPING COUNTRIES DISCLOSURE REQUIREMENTS DOLLAR BONDS DOMESTIC INSTITUTIONAL INVESTORS DOMESTIC MARKET EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET DEBT EMERGING MARKETS EQUITIES EQUITY HOLDING EQUITY INSTRUMENTS EXCHANGE RATES FAIR VALUE FEDERAL RESERVE FEDERAL RESERVE BANK FIDUCIARY RESPONSIBILITY FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL STABILITY FINANCIAL STUDIES FINANCIAL SUPPORT FINANCIAL SYSTEM FIXED INCOME FIXED INCOME INVESTMENT FIXED INCOME MARKET FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FUND MANAGERS GLOBAL DEVELOPMENT FINANCE GOVERNMENT BOND GOVERNMENT BONDS GOVERNMENT DEBT GOVERNMENT PAPER HOLDINGS HOLDINGS OF BANK INDEXED BONDS INFLATION INFLATION RISK INFLATION RISKS INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTEREST RATE INTEREST RATE DERIVATIVES INTERNATIONAL BANK INTERNATIONAL DIVERSIFICATION INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL PORTFOLIO INTERNATIONAL SETTLEMENTS INVESTING INVESTMENT BEHAVIOR INVESTMENT HORIZON INVESTMENT HORIZONS INVESTMENT INSTRUMENTS INVESTMENT OPPORTUNITIES INVESTMENT PORTFOLIO INVESTMENTS IN EQUITY INVESTOR BASE INVESTOR DEMAND INVESTOR REDEMPTIONS ISSUANCE ISSUANCES LEVEL OF CONFIDENCE LIABILITY LIFE INSURANCE LIFE INSURANCE COMPANIES LIFE INSURANCE COMPANY LIQUID ASSETS LIQUIDATIONS LIQUIDITY LIQUIDITY CRISES LIQUIDITY RATIO LOCAL CURRENCY LONG-TERM ASSETS LONG-TERM CAPITAL LONG-TERM DEBT LONG-TERM DEBT MARKET LONG-TERM FINANCE LONG-TERM INSTRUMENTS LONG-TERM INVESTMENT LONG-TERM INVESTMENTS LONG-TERM INVESTORS LONG-TERM LIABILITIES LONG-TERM PAPER MARK TO MARKET MARK-TO-MARKET MARK-TO-MARKET ACCOUNTING MARKET CONDITIONS MARKET LIQUIDITY MARKET MECHANISM MARKET PARTICIPANTS MARKET PLAYERS MARKET PRICES MATURITIES MATURITY MATURITY DATE MATURITY SPECTRUM MATURITY STRUCTURE MATURITY STRUCTURES MONETARY POLICY MONEY MARKET MONEY MARKET INSTRUMENT MORAL HAZARD MORTGAGES MUTUAL FUND MUTUAL FUND INDUSTRY MUTUAL FUND MANAGERS MUTUAL FUNDS OPEN-END FUNDS OPPORTUNITY COST OUTSTANDING DEBT PENSION PENSION FUND PENSION FUNDS PENSION REFORM PENSION REFORMS PENSION SYSTEM PENSION SYSTEMS PENSIONS PORTFOLIO PORTFOLIO CHOICE PORTFOLIO HOLDINGS PORTFOLIO INVESTMENTS PORTFOLIO REGULATIONS PORTFOLIOS PRICE RISK PRINCIPAL-AGENT PROBLEM PRINCIPAL-AGENT PROBLEMS PUBLIC FINANCE PUBLIC SAVINGS RATE OF RETURN REGULATORY PRACTICES RETAIL INVESTORS RETIREMENT INCOME SECURITY RETURN RETURNS RISK AVERSION RISK EXPOSURE RISK FACTORS RISK PROFILE RISK PROFILES SECURITIES SECURITIES MARKETS SHORT MATURITIES SHORT MATURITY SHORT-TERM ASSET SHORT-TERM ASSETS SHORT-TERM BONDS SHORT-TERM DEBT SHORT-TERM INSTRUMENTS SOVEREIGN BONDS SOVEREIGN DEBT STOCKS TOTAL DEBT TRADING TRANCHE TRANCHES TRANSACTION TRANSACTION COSTS TRANSPARENCY TREASURY TURNOVER TYPE OF INVESTOR YIELD CURVE Opazo, Luis Raddatz, Claudio Schmukler, Sergio L. Institutional Investors and Long-Term Investment : Evidence from Chile |
| geographic_facet |
Latin America & Caribbean Chile |
| relation |
Policy Research Working Paper;No. 6922 |
| description |
Developing countries are trying to
develop long-term financial markets and institutional
investors are expected to play a key role. This paper uses
unique evidence on the universe of institutional investors
from the leading case of Chile to study to what extent
mutual funds, pension funds, and insurance companies hold
and bid for long-term instruments, and which factors affect
their choices. The paper uses monthly asset-level portfolios
to show that, despite the expectations, mutual and pension
funds invest mostly in short-term assets relative to
insurance companies. The significant difference across
maturity structures is not driven by the supply side of debt
or tactical behavior. Instead, it seems to be explained by
manager incentives (related to short-run monitoring and the
liability structure) that, combined with risk factors, tilt
portfolios toward short-term instruments, even when
long-term investing yields higher returns. Thus, the
expansion of large institutional investors does not
necessarily imply longer-term markets. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Opazo, Luis Raddatz, Claudio Schmukler, Sergio L. |
| author_facet |
Opazo, Luis Raddatz, Claudio Schmukler, Sergio L. |
| author_sort |
Opazo, Luis |
| title |
Institutional Investors and Long-Term Investment : Evidence from Chile |
| title_short |
Institutional Investors and Long-Term Investment : Evidence from Chile |
| title_full |
Institutional Investors and Long-Term Investment : Evidence from Chile |
| title_fullStr |
Institutional Investors and Long-Term Investment : Evidence from Chile |
| title_full_unstemmed |
Institutional Investors and Long-Term Investment : Evidence from Chile |
| title_sort |
institutional investors and long-term investment : evidence from chile |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/06/19680163/institutional-investors-long-term-investment-evidence-chile http://hdl.handle.net/10986/18756 |
| _version_ |
1764442752893845504 |
| spelling |
okr-10986-187562021-04-23T14:03:49Z Institutional Investors and Long-Term Investment : Evidence from Chile Opazo, Luis Raddatz, Claudio Schmukler, Sergio L. AGENCY PROBLEMS ASSET CLASS ASSET CLASSES ASSET HOLDINGS ASSET MANAGERS ASSET PRICES ASSET VALUES ASSET-LIABILITY MISMATCH ASYMMETRIC INFORMATION AUCTION AUCTION AMOUNT AUCTIONS BANK DEPOSITS BANK POLICY BANKING SECTOR BANKING SYSTEM BID BIDS BOND BOND AUCTIONS BOND FUNDS BOND INDEX BOND INDICES BOND MARKETS BORROWER CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CAPITAL REQUIREMENT CASH FLOWS CENTRAL BANK CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE BOND CORPORATE BOND MARKET CORPORATE BONDS CORPORATE DEBT CORPORATE INVESTMENT DEBT DEBT HOLDINGS DEBT ISSUANCES DEBT MATURITIES DEBT MATURITY DEBTORS DEFAULT RISK DERIVATIVES DERIVATIVES MARKETS DEVELOPING COUNTRIES DISCLOSURE REQUIREMENTS DOLLAR BONDS DOMESTIC INSTITUTIONAL INVESTORS DOMESTIC MARKET EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET DEBT EMERGING MARKETS EQUITIES EQUITY HOLDING EQUITY INSTRUMENTS EXCHANGE RATES FAIR VALUE FEDERAL RESERVE FEDERAL RESERVE BANK FIDUCIARY RESPONSIBILITY FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL STABILITY FINANCIAL STUDIES FINANCIAL SUPPORT FINANCIAL SYSTEM FIXED INCOME FIXED INCOME INVESTMENT FIXED INCOME MARKET FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FUND MANAGERS GLOBAL DEVELOPMENT FINANCE GOVERNMENT BOND GOVERNMENT BONDS GOVERNMENT DEBT GOVERNMENT PAPER HOLDINGS HOLDINGS OF BANK INDEXED BONDS INFLATION INFLATION RISK INFLATION RISKS INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTEREST RATE INTEREST RATE DERIVATIVES INTERNATIONAL BANK INTERNATIONAL DIVERSIFICATION INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL PORTFOLIO INTERNATIONAL SETTLEMENTS INVESTING INVESTMENT BEHAVIOR INVESTMENT HORIZON INVESTMENT HORIZONS INVESTMENT INSTRUMENTS INVESTMENT OPPORTUNITIES INVESTMENT PORTFOLIO INVESTMENTS IN EQUITY INVESTOR BASE INVESTOR DEMAND INVESTOR REDEMPTIONS ISSUANCE ISSUANCES LEVEL OF CONFIDENCE LIABILITY LIFE INSURANCE LIFE INSURANCE COMPANIES LIFE INSURANCE COMPANY LIQUID ASSETS LIQUIDATIONS LIQUIDITY LIQUIDITY CRISES LIQUIDITY RATIO LOCAL CURRENCY LONG-TERM ASSETS LONG-TERM CAPITAL LONG-TERM DEBT LONG-TERM DEBT MARKET LONG-TERM FINANCE LONG-TERM INSTRUMENTS LONG-TERM INVESTMENT LONG-TERM INVESTMENTS LONG-TERM INVESTORS LONG-TERM LIABILITIES LONG-TERM PAPER MARK TO MARKET MARK-TO-MARKET MARK-TO-MARKET ACCOUNTING MARKET CONDITIONS MARKET LIQUIDITY MARKET MECHANISM MARKET PARTICIPANTS MARKET PLAYERS MARKET PRICES MATURITIES MATURITY MATURITY DATE MATURITY SPECTRUM MATURITY STRUCTURE MATURITY STRUCTURES MONETARY POLICY MONEY MARKET MONEY MARKET INSTRUMENT MORAL HAZARD MORTGAGES MUTUAL FUND MUTUAL FUND INDUSTRY MUTUAL FUND MANAGERS MUTUAL FUNDS OPEN-END FUNDS OPPORTUNITY COST OUTSTANDING DEBT PENSION PENSION FUND PENSION FUNDS PENSION REFORM PENSION REFORMS PENSION SYSTEM PENSION SYSTEMS PENSIONS PORTFOLIO PORTFOLIO CHOICE PORTFOLIO HOLDINGS PORTFOLIO INVESTMENTS PORTFOLIO REGULATIONS PORTFOLIOS PRICE RISK PRINCIPAL-AGENT PROBLEM PRINCIPAL-AGENT PROBLEMS PUBLIC FINANCE PUBLIC SAVINGS RATE OF RETURN REGULATORY PRACTICES RETAIL INVESTORS RETIREMENT INCOME SECURITY RETURN RETURNS RISK AVERSION RISK EXPOSURE RISK FACTORS RISK PROFILE RISK PROFILES SECURITIES SECURITIES MARKETS SHORT MATURITIES SHORT MATURITY SHORT-TERM ASSET SHORT-TERM ASSETS SHORT-TERM BONDS SHORT-TERM DEBT SHORT-TERM INSTRUMENTS SOVEREIGN BONDS SOVEREIGN DEBT STOCKS TOTAL DEBT TRADING TRANCHE TRANCHES TRANSACTION TRANSACTION COSTS TRANSPARENCY TREASURY TURNOVER TYPE OF INVESTOR YIELD CURVE Developing countries are trying to develop long-term financial markets and institutional investors are expected to play a key role. This paper uses unique evidence on the universe of institutional investors from the leading case of Chile to study to what extent mutual funds, pension funds, and insurance companies hold and bid for long-term instruments, and which factors affect their choices. The paper uses monthly asset-level portfolios to show that, despite the expectations, mutual and pension funds invest mostly in short-term assets relative to insurance companies. The significant difference across maturity structures is not driven by the supply side of debt or tactical behavior. Instead, it seems to be explained by manager incentives (related to short-run monitoring and the liability structure) that, combined with risk factors, tilt portfolios toward short-term instruments, even when long-term investing yields higher returns. Thus, the expansion of large institutional investors does not necessarily imply longer-term markets. 2014-06-25T20:25:31Z 2014-06-25T20:25:31Z 2014-06 http://documents.worldbank.org/curated/en/2014/06/19680163/institutional-investors-long-term-investment-evidence-chile http://hdl.handle.net/10986/18756 English en_US Policy Research Working Paper;No. 6922 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Chile |