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Emergence of sovereign wealth funds

Jean-François Carpantier () and Wessel Vermeulen

Journal of Commodity Markets, 2018, vol. 11, issue C, 1-21

Abstract: In this paper we show that domestic economic and political characteristics can explain why some countries established a Sovereign Wealth Funds (SWFs) and others not. We find that 1) the existence of natural resources profits, 2) the government structure and 3) the ability to invest in a socially beneficial way in the domestic economy can explain this choice. At the same time these same factors do not relate to the size of the national savings. We use a sample of countries that established a SWF in the period 1998–2008 and compare them to those that did not set up a fund in the same period. The results suggest that SWFs tend to be established in autocratically run countries that have difficulties finding suitable opportunities for domestic investments.

Keywords: Sovereign wealth fund; Institutions; Natural resources (search for similar items in EconPapers)
JEL-codes: E21 E62 F39 G23 H52 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Emergence of sovereign wealth funds (2018)
Working Paper: Emergence of Sovereign Wealth Funds (2014) Downloads
Working Paper: Emergence of Sovereign Wealth Funds (2014) Downloads
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DOI: 10.1016/j.jcomm.2018.01.002

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