Institutional investors’ allocation to emerging markets: A panel approach to asset demand

Bruno Bonizzi

Journal of International Financial Markets, Institutions and Money, 2017, vol. 47, issue C, 47-64

Abstract: This study assesses the factors driving insurance companies and pension funds’ portfolio allocation to emerging market assets. By making use of the Emerging Portfolio Fund Research database, it estimates asset demand equations for emerging markets’ equities and bonds for insurance companies and pension funds from advanced countries. These are estimated by using recent advances in the literature on panel autoregressive distributed lag models. Two key results emerge: firstly, consistent with ‘search for yield’ investment behaviour, weaker balance sheet conditions, measured by the lower funding level of pension funds, positively affect the asset allocation to emerging markets. Secondly, the accumulation of reserves by emerging markets is a significant attractor of foreign institutional investment.

Keywords: Asset demand; Emerging markets; Insurance companies; Pension funds; Institutional investors; Panel ARDL; Search for yield (search for similar items in EconPapers)
JEL-codes: F30 G11 G15 G23 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042443116301858
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Institutional Investors Allocation to Emerging Markets: a Panel Approach to Asset Demand (2015)
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:eee:intfin:v:47:y:2017:i:c:p:47-64

DOI: 10.1016/j.intfin.2016.11.009

Access Statistics for this article

Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely

More articles in Journal of International Financial Markets, Institutions and Money from Elsevier
Bibliographic data for series maintained by Catherine Liu ().