The impact of Sovereign Wealth Fund investments on the performance of listed companies

Bao Ngoc Dinh
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Bao Ngoc Dinh: CERAG - Centre d'études et de recherches appliquées à la gestion - UPMF - Université Pierre Mendès France - Grenoble 2 - CNRS - Centre National de la Recherche Scientifique

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Abstract: In this study, we attempt to shed some light on the effects of SWF investment activities by analyzing the short-term impact of SWF investments on the performance of those companies in which they invest. We collect both direct and indirect data on equity investments for each SWF. The sample consists of 60 investments by 11 important SWFs from around the world (SWF of the United Arab Emirates, China, Kuwait, Russia, France, Singapore...) during the period 2003 to 2009. To quantify the valuation effects of SWF investments, we use the event study methodology to estimate abnormal returns to the shares around the times that news of the transactions of SWFs becomes publicly available. We find that the announcement effect of SWF investments in listed companies is positive and the level of transparency of SWFs influence the positive impact of SWF investments on the performance of those companies in which they invest.

Keywords: Sovereign wealth funds; performance; event study (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-ifn
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00658489v1
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Published in 2011

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