Inequality, autocracy, and sovereign funds as determinants of foreign portfolio equity flows

David Kemme (), Bhavik Parikh and Tanja Steigner

Journal of Financial Research, 2021, vol. 44, issue 2, 249-278

Abstract: We identify new country characteristics that influence cross‐border equity flows: income inequality, autocracy, and sovereign wealth funds. Using 149 source countries and 34 Organisation for Economic Co‐operation and Development (OECD) host countries for 2002–2013, we find that OECD host countries receive higher foreign portfolio investment (FPI) inflows from source countries with high income inequality and source countries with a sovereign wealth fund, but lower inflows from autocratic source countries. We argue that concentrated wealth in a society, overseas investments for the benefit of future generations, and political regimes influence FPI. These variables have been understudied though they provide valuable indicators for policy makers and investors. We supplement our core analysis with realistic interactions between these new variables and with the increasing importance of tax havens. Our results hold throughout a variety of robustness checks.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.1111/jfir.12240

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jfnres:v:44:y:2021:i:2:p:249-278

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0270-2592

Access Statistics for this article

Journal of Financial Research is currently edited by Jayant Kale and Gerald Gay

More articles in Journal of Financial Research from Southern Finance Association Contact information at EDIRC., Southwestern Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().